Hoover Institution | Stanford University

TENNENBAUM PROGRAM FOR FACT-BASED POLICY

US Energy Security
How We Got Here and Where We Are Headed

Daniel Yergin

Nine US presidents in a row—from Richard Nixon through Barack Obama and Donald Trump—
used their State of the Union addresses to proclaim, in one way or another, “energy
independence” as a national goal for the United States. But Joe Biden’s 2024 State of
the Union address was diferent. There was no mention of energy independence. He did,
however, pledge to create a Climate Corps of sixty thousand young people “patterned
afer the Peace Corps.”

That contrast tells much about how the energy position of the United States has changed.
What for decades had seemed highly improbable has happened: The United States, afer
decades of wanting, is actually “energy independent” in terms of physical supply. Moreover,
the United States is once again the world’s largest producer of oil and natural gas. No nation
has ever produced as much on a daily basis as the United States today. It is also the world’s
second-largest producer of electricity from solar and wind. All this adds up to energy security—
but only up to a point.

“Energy security” means the availability of reliable and reasonably priced energy. That is a
position bolstered by diversifcation of sources, resilience in the face of disruptions, steady
supply chains, well-functioning markets, and continued technological advance. And, by those
measures, US energy security is much improved. Partly because of the attainment of energy
independence and the confdence that came with it, as well as the intense focus on climate,
attention has shifed away from energy security to a focus on reducing emissions and a transi-
tion away from hydrocarbons.

But there are limits to what “energy independence” means. Physical oil supply is only part of
the picture. Oil prices are determined on the world market. Moreover, global events, geopo-
litical confict, unanticipated increases in electricity demand, and concerns about extreme
weather—all these have recently pushed energy security back on the agenda. And energy
security now applies not only in terms of oil and gas and electricity, but also minerals and
manufacturing dependence and cybersecurity. In addition, the complexity of an energy
transition has become increasingly clear.

A Hoover Institution Essay

September 2024
 This essay will explore the signifcance of the United States’ regaining the energy indepen-
dence that it had lost three-quarters of a century before, the essential role of the “shale
revolution” in that recovery, and the impact on global politics. It will also examine how the
climate issue is changing the national energy agenda and policy around the topic of “energy
transition,” as well as prospects going forward with a new presidential administration and
beyond—and how all of this relates to energy security.

THE IMPORTER

The United States had historically been the world’s largest oil producer, providing six out of
every seven barrels of oil used by the Allies in World War II. In 1946, the frst tanker carrying
Middle East oil arrived in Philadelphia’s harbor. In the next few years, postwar demand started
to outrun domestic production, putting the United States on its way to being a net importer.
“Net” means the fnal balance between total imports and total exports—the key measure of
reliance. (At any given point of time, some oil and oil products may be exported because
of quality or location or refnery confguration, while others are imported.) By the beginning
of the 1970s, imports were accelerating, and the United States was becoming increasingly
dependent on foreign oil at a time when global demand was burgeoning.

The development of America’s shale oil and gas has proved momentous both in transform-
ing the energy position of the United States and in its geopolitical impact. But it was not
something that could have been imagined at the time of the 1973 Oil Embargo, which intro-
duced the modern age of energy. The embargo was the response of the Arab oil exporters to
US resupply of weapons to Israel, which was at risk of defeat from the onslaught of a surprise
attack by Egypt and Syria. By that time, the world economy had become heavily dependent
on oil supplies from the Middle East. The embargo triggered a fourfold increase in the price of
oil, a deep global recession, and panic in consuming countries. In the United States, the panic
was all too visible in long gasoline lines, in which angry motorists fought for limited supplies,
as well as in the rationing of access to gasoline to motorists depending on whether the
license on their cars ended in an odd or even number.

Subsequently, however, it became clear that the shortages and high prices also resulted from
the federal government’s eforts to control the energy markets through regulations and price
controls, which undermined investment and prevented the market from responding fexibly.
The consequences were costly and destructive—a lesson to be heeded when the drive for
such government control returns.

The crisis proved to be a political shock as well as an economic one. For, at that time, most
Americans, even if they thought about it at all, did not know that the United States had
become the world’s largest oil importer, despite warnings over the preceding two years
about tightening markets and a coming energy crisis.1

The crisis transformed oil and natural gas and, more broadly, energy overall into both high
politics and contentious politics. A drive began to develop new oil resources to diversify
away from dependence on the Organization of Petroleum Exporting Countries (OPEC). But

2 DANIEL YERGIN U US ENERGY SECURITY

that efort in the United States, for oil as well as natural gas, was hampered by the complex
and burdensome system of federal regulation and price controls.

The 1973 crisis was followed by another in 1979, with the revolution that toppled the
Shah in Iran disrupting supplies from that country and further doubling oil prices. Under
Presidents Jimmy Carter and Ronald Reagan, the system of price controls was progres-
sively dismantled. Coal for generating electricity was promoted as national policy in order
to push out oil from electric generation, and new nuclear power plants were built.

Yet energy independence seemed only more unattainable. In 1973, the United States was
importing a third of its oil. By 2008, it was almost 60 percent.

But then came the shale revolution.

SHALE AND ENERGY INDEPENDENCE

Shale was not an overnight revolution. The textbooks said such production from very dense
rock formations was commercially not possible. But afer three decades of research, experi-
mentation, and technological advances—and in the face of continuing skepticism—in the
late 1990s and early 2000s it was proved possible. Until then almost all oil and gas wells
were vertical—they went straight down. But the advent of computer-assisted horizontal drill-
ing meant that a well could go down a mile or two vertically into the earth, well below the
water table, and then make a gradual ninety-degree turn and run another two miles or more
horizontally, exposing much more rock. The second advance was hydraulic fracturing—in
which a mixture composed mostly of water with sand and a small amount of chemicals and
guar (which is also used in ice cream and yogurt) is injected under pressure through that
horizontal pipe. This process breaks down the dense rock sufciently to allow oil and gas to
fow into the well and up to the surface. The entire process became better known as “frack-
ing.” These advances were augmented by the development of 3D seismic imaging, which
provided much greater understanding of the subsurface geology. The development of shale
was facilitated by an entrepreneurial culture in the domestic US oil and gas industry as well
as private ownership of mineral rights.

This new shale technology was frst applied to natural gas. The impact of these technolo-
gies only became apparent around 2007 and 2008, when natural gas production began to
increase. By the time of his 2011 State of the Union address, President Barack Obama could
declare, “Recent innovations have given us the opportunity to tap larger reserves—perhaps
a century’s worth—in the shale under our feet.”2 By then shale technology was beginning to
be applied to oil as well—with an impact far greater than most anyone would have imagined.
Early criticism of the new shale technology on environmental grounds faded away as output
grew. It became recognized that shale production is an industrial activity regulated at both the
federal and state levels. The overall results are something that could not been contemplated
earlier this century: US crude oil production has almost tripled, from 5 million barrels per
day in 2008 to 13.4 in August 2024 (see fgure 1). The United States today produces consid-
erably more oil than the traditional leaders—Saudi Arabia and Russia. As for US natural gas

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 FIGURE 1 US crude oil production

16

14

12
Million barrels per day
10

0
2008 2024

Source: Data from US Energy Information Administration (EIA).

FIGURE 2 US natural gas production

40

35
Trillion cubic feet per year

30

25

20

15

10

0
2005 2023

Source: Data from US EIA.

production, it has more than doubled, from 18 trillion cubic feet in 2005 to 37.9 trillion in 2023
(see fgure 2). This has made the United States the world’s largest producer of natural gas,
almost double that of Russia. Today, shale oil accounts for almost 70 percent of total US oil
production and almost 80 percent of natural gas production. The top states include Texas,
New Mexico, North Dakota, Pennsylvania, and Louisiana.

It was not, however, just a matter of output; it was also one of exports. Owing to the increas-
ing volumes of shale gas, the United States was producing more natural gas than the domestic

4 DANIEL YERGIN U US ENERGY SECURITY

market could absorb. The outlet became the export of liquefed natural gas (LNG), which began
in 2016. This grew at such a rate that by 2023 the United States had become the world’s larg-
est exporter of LNG. While the volumes of shale oil also grew rapidly, they were not altogether
well matched to the requirements of the US refning system, which turns crude oil into gasoline,
diesel, jet fuel, and other products. By 2015, US oil production was more than 80 percent higher
than it had been a decade earlier. Access to global markets was needed. A ban on the exports
of crude, which had been implemented in the afermath of the 1973 crisis, was lifed in 2015, and
the United States became a major exporter of crude oil and what are called natural gas liquids.3

Altogether, the shale revolution has made the United States energy independent in physical
terms for the frst time since the late 1940s, and the impact has been enormous. The net oil
import bill for the country in 2008 was $388 billion. By 2023, it had fallen to $4.7 billion—a
99 percent decline. (The fact that there was still a small charge refected difering prices for
diferent grades of oil.) Cumulatively, it has saved the United States trillions of dollars on its
import bill, keeping dollars in the United States that would otherwise have been exported. It
is responsible for millions of jobs, directly and indirectly. It has contributed signifcantly to
federal and state treasuries. The availability and relatively low price of domestic natural gas
has stimulated hundreds of billions of dollars of investment in new manufacturing facilities
by both US and foreign companies.4

THE “SHALE GALE” AND GEOPOLITICS

The impact of the shale revolution is not just economic. Shale has proved geopolitically sig-
nifcant, bolstering America’s position in the world.5 The Obama administration was able to
impose sanctions on Iranian oil exports in pursuit of restrictions on Iran’s nuclear weapons
program because growing US oil supplies exceeded the volumes of Iranian oil that would be
kept of the world market by sanctions. In another example, US oil and gas exports to India
have become an important part of an expanded relationship between the two countries.

But the biggest impact of the shale revolution, at least so far, came with Russia’s invasion of
Ukraine in 2022. Early on, Russian president Vladimir Putin saw that the development of shale
gas would challenge the primacy of Russian gas exports into Europe—and Moscow’s power.
Russia fnanced environmental opposition to shale gas development in Eastern Europe. In 2013,
at an international economic conference in St. Petersburg, at the mention of slantsevy gaz—
shale gas—Putin erupted in fury, denouncing shale as “barbaric” and dangerous and envi-
ronmentally destructive. It was clear that he saw the advent of shale as something that would
strengthen the relative position of the United States. And, crucially, he viewed anything that
might diminish the signifcance of Russian gas—or compete with it—as a direct threat to
Russia’s power. The Ukraine War would subsequently prove him right on both counts.6

In 2022, Putin sought to wield the “energy weapon”—cutting of Russian pipeline gas exports
on which Europe relied heavily—with the aim of economically shattering the European coali-
tion supporting Ukraine’s resistance. But the weapon failed because Europe was able to
replace the embargoed Russian pipeline gas with imported gas—additional supplies from

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 FIGURE 3 World crude oil prices

120

100
Brent/dollars per barrel

80

60

40

20

0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Source: Data from S&P Global Commodity Insights, compiled July 2, 2024. © 2024 S&P Global.

Norway but the bulk in the form of LNG. About 40 percent of those LNG imports were pro-
cessed in the United States from shale gas. On the consumption side, European demand
went down in response to high prices, conservation eforts, and reduced industrial activity.
But, without that LNG, the European coalition supporting Ukraine could well have collapsed
under the dire economic pressure of a lack of energy and sky-rocketing prices. So signifcant
was that supply that President Biden promised Europeans in 2022 to substantially increase
US LNG exports to Europe. As the Ukraine War progressed, the geopolitical signifcance
of LNG became evident: US LNG had become part of the expanded arsenal of the NATO
alliance. Altogether, shale oil and gas have strengthened the strategic position of the
United States and its alliance partners. Without US shale gas and the ability to process
it into LNG, the Russian cutof to Europe would have been catastrophic in its impact.

That last points to a further impact of the Russian invasion of Ukraine—the return of energy
security as a major concern. It had certainly slipped of the table for the United States owing to
the speed and scale of the shale revolution, as well as the increased concentration on climate.
The “energy independence” that nine presidents had called for had eventually turned out not
to be a chimera but rather a fact. As the “shale gale” erased net imports, the country could
now take energy independence for granted and move on to other topics. For both the United
States and many other countries around the world, the collapse in demand and plummeting
oil prices that came with the COVID-19 pandemic further turned attention away from energy
security (see fgure 3).

But the Russian invasion abruptly made energy security a priority once again. The Biden
administration, alarmed by spiking prices and shortfalls, pushed the US oil industry to
increase production. In 2023, the Western Hemisphere exceeded the Middle East in oil pro-
duction; and virtually all the growth in world supply came from the Western Hemisphere—
not only the United States, but also Canada, Brazil, and Guyana. This “Western Hemisphere
surge” became a bulwark of stability in the face of the wars in Ukraine and the Middle East,
which in the past would have sent prices up.7

6 DANIEL YERGIN U US ENERGY SECURITY

THE SCALE OF THE US ENERGY SYSTEM

The “energy transition” has become the organizing topic for energy and environmental dis-
cussions around the world. It is meant to describe the shif to a new energy system that no
longer depends upon hydrocarbons, and it is ofen posited in terms of reaching net zero in
terms of greenhouse gases (GHGs) by 2050—or by 2060 or 2070 for some countries.8

In order to understand the challenge of an energy transition and what it means for the
United States, it is important to grasp the scale of the US energy system. The global energy
system is in fact remarkably global—with production and consumption linked by trade
and transport across the planet. Of course, the United States is a very big and complex
part of that system, although its trading links have changed dramatically over the last
two decades—as we will see shortly.

The United States was formerly the biggest energy consumer in the world. But no longer. That
title now belongs to China. The United States represents 16 percent of total world energy
consumption and China 26 percent, meaning that China uses almost 70 percent more energy
than the United States. But in terms of GDP, the positions are reversed: the United States is
about 25 percent of world GDP and China 18 percent. China’s larger consumption refects the
fact it has a much bigger base of heavy industry, and its population is four times greater than
the United States. One other striking diference: although it has a strong domestic petroleum
industry, China imports almost 75 percent of its oil, while the United States on a net basis
imports none. That is something very apparent to Beijing.9

The “energy mix”—the distribution of energy sources on which the US economy runs—
demonstrates the continuing predominance of “hydrocarbons”—the all-inclusive term for
oil, natural gas, and coal. In 2022, hydrocarbons accounted for 81 percent of US energy
demand. In 2023, that dependence declined by 0.4 percent to 80.6 percent. Breaking that
down fnds oil and natural gas almost neck and neck—oil at 37.9 percent and gas at 35.9 per-
cent. Coal has dropped to 8.7 percent as natural gas has upended its use in electric genera-
tion. Nuclear is 8.6 percent, and biomass, which includes ethanol, is 5.3 percent. Hydro and
solar are about even—at about 1 percent each, while wind is 1.5 percent (see fgure 4).10

If we look at electricity alone, the picture is diferent: natural gas fuels 43 percent of gen-
eration; coal, 16.2; and nuclear, 18.6 percent. Conventional hydropower is 5.7 percent
(see fgure 5).11

Wind and solar were negligible a decade and a half ago. But then, with costs coming down
and international supply chains developing, and bolstered by government incentives and man-
dates, they began what has proved to be rapid growth. At this point, wind is almost three times
greater than solar—10.2 percent of total electricity generation versus 3.9 percent for solar.
But solar is growing at a faster clip. Between 2015 and 2023, while installed wind capacity
doubled, solar installation grew almost eightfold, and that rapid rate is expected to continue,
with a doubling from current levels by 2027.12 Much smaller are biomass, at 1.1 percent, and
geothermal, at 0.4 percent.

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 FIGURE 4 US energy mix 2023

Wind and solar, 2.5%

Hydro, 1.0%
Biomass, 5.3%

Coal, 8.7%

Nuclear, 8.6% Oil, 37.9%

Natural gas, 35.9%

Source: US EIA, Monthly Energy Review, July 2024.

FIGURE 5 US electricity by source 2023

Other, 1.5%
Solar,
3.8%

Wind, 10.2%

Hydropower,
5.7%

Natural gas, 43.0%

Coal, 16.2%

Nuclear, 18.6%

Source: US EIA, Monthly Energy Review, July 2024.

8 DANIEL YERGIN U US ENERGY SECURITY

To be useful, energy has to be delivered to consumers, and that requires a huge deployment
of infrastructure that is both reliable and afordable. To give some idea of the nationwide
system, there are over 450,000 miles of bulk electric power transmission lines; 230,000 miles
of liquids pipelines; 411,000 miles of gas transmission and gathering pipes; 140,000 stations
and stores selling gasoline; and 12,500 utility-scale power plants that generate electricity.
Over 72,000 wind turbines are operating in the United States, and by one estimate 225 million
solar panels are spread across the country in solar parks or on roofops.

Since 1980, US energy consumption has grown by about 25 percent. Over the same time,
however, overall GDP in infation-adjusted dollars has tripled. What this means is that the
United States has become a more efcient consumer of energy. It uses less than half as much
energy per unit of GDP as it did in 1980. This refects both greater improvements in the use
of energy—think LED lights in place of incandescent bulbs—and also in the way the economy
has changed. In the 1980s, no one talked about “Tech” as a sector, as companies like Google
and Amazon did not even exist. Traditional energy-intensive manufacturing, such as steel,
loomed larger then as a share of the economy than it does today. A striking contrast is with
China: overall industrial output accounts for 18 percent of GDP for the United States com-
pared to 40 percent for China.13

Where the change is most evident, however, is in terms of transportation and oil. Between
1980 and 2023, US oil consumption grew by something less than 20 percent—from 17 million
barrels per day to 20.2—although population has grown by almost 50 percent and the number
of cars and light trucks on the road has more than doubled. The main reason for comparably
minor growth in oil consumption is automobile fuel efciency standards. They were imposed
by the federal government in 1975, two years afer the 1973 Oil Embargo. At that time, the
average car got fourteen miles to the gallon. Today, it gets twenty-fve miles to the gallon—an
80 percent improvement.

It is one thing to continue to improve miles per gallon of automobiles. It is quite another thing
to eliminate the “gallons” altogether. That is the ambition of some for the energy transition. In
the International Energy Agency’s “net zero by 2050” scenario, oil and natural gas demand in
2050 will still be signifcant although much smaller—one-quarter of what it is today. But the oil
will be used for other purposes, since 94 percent of the world’s car feet is projected in that
particular scenario to be electric.14

“THE ULTIMATE THREAT TO HUMANITY”

Democratic presidential administrations have increasingly focused on climate and carbon.

Especially afer the 2015 Paris Agreement, energy transition became an organizing principle
for energy policies. The objective is to eliminate emissions of carbon dioxide, methane, and
other greenhouse gases, transition away from oil and natural gas, and phase out coal from
the US economy—and also achieve similar objectives on a global basis in collaboration
with other countries. To accomplish this on an accelerated basis has been the focus of the
Biden administration.

HOOVER INSTITUTION U STANFORD UNIVERSITY 9

 One of President Biden’s frst acts on his frst day in the White House in 2021 was to sign an
executive order reinstating US participation in the Paris Agreement, by which 195 countries
(including the United States at the time of signing) had agreed to voluntarily work to prevent
temperatures from increasing by 2 degrees centigrade above pre-industrial levels and, prefer-
ably, no more than 1.5 degrees. This target emerged from the work of the Intergovernmental
Panel on Climate Change (IPCC), sponsored by the United Nations.

Rejoining the Paris Agreement was meant to demonstrate an immediate break from the
Trump administration, which had adopted “energy dominance” as its organizing theme. In
2017, President Trump had withdrawn the United States from the Paris Agreement because,
he said, it “disadvantages the United States to the exclusive beneft of other countries,” allow-
ing China to “increase their emissions” and India to “double their coal production.”15

For Biden, in sharp contrast to Trump, climate is an overriding issue—an “existential

threat to all of us,” he has said, and “the ultimate threat to humanity.”16 The Biden admin-
istration sought to embed climate considerations in actions across the administration
in a “whole of government” approach. A senior climate advisor was assigned to Cabinet
ofcers to ensure that climate considerations are refected in decisions and actions. The
Department of Defense declared climate change a “national security risk.” The administra-
tion called for a “carbon free” electric generation system by 2035 and for half the new cars
sold in the United States to be electric by 2030. It has imposed new restrictions and regula-
tions on oil and gas production, and it has rolled out tougher emission-reduction standards
on conventional gasoline-powered cars, inevitably driving up their future price and thus, it
is thought, speeding the shif to electric vehicles (EVs) on the part of both consumers and
automakers.

“THE BIG CARROT”: THE INFLATION REDUCTION ACT

The centerpiece of the Biden administration’s climate policy is the 2022 Infation Reduction
Act (IRA). Following on the Bipartisan Infrastructure Law and the CHIPS and Science Act,
the IRA is the third part of the administration’s industrial policy trifecta—what Jake Sullivan,
Biden’s national security advisor, called “a modern industrial and innovation strategy.”17 The
IRA is monumental in its scale and breadth and also in its costs. The provisions are both a
roadmap to and an outline for a full energy transition. The Biden administration describes it
as “a transformative law”18 and “the most signifcant climate legislation in U.S. history, ofering
funding, programs and incentives to accelerate the transition to a clean energy economy.”19
At its signing ceremony, President Biden declared it “one of the most signifcant laws in our
nation’s history” and the “most aggressive action, ever, ever, ever to confront the climate
crisis and increase our energy security.”20

In addition to climate, the legislation has another major focus: China—that is, competing with
China and reducing dependence on Chinese-dominated supply chains. It is also aimed, in the
words of Energy Secretary Jennifer Granholm, at powering a “manufacturing revival” in the
United States and increasing the share of “products made in America.”21

10 DANIEL YERGIN U US ENERGY SECURITY

The IRA is sometimes described as “agnostic” in that it is neither prescriptive nor narrowly
focused. It seeks to stimulate a wide range of technologies, manufacturing, and markets;
and it aims at molecules as well as electrons, providing opportunities not only for renewable
developers and technology companies but also incumbent energy companies.

This approach difers markedly from what companies describe as the detailed and highly
prescriptive regulatory approach of the European Union (EU). The scale and approach of
the IRA—using the federal balance sheet to promote a domestic transition policy through
incentives—has disconcerted the EU and various European governments, which have been
accustomed to seeing themselves at the forefront on climate policy, well ahead of the
United States.

The discomfort among European governments has increased as European-based com-

panies, along with Asian companies, have pursued major new investment opportunities
in the United States, drawn by the magnetic power of the IRA incentives—what Energy
Secretary Granholm has called “massive carrots.”22 Altogether, it is estimated that more
than $300 billion of private sector capital has been allocated and actually fnanced in
response to the IRA.23

For the Japanese, long accustomed to criticism from Washington for implementing “industrial
policy,” the US initiatives have engendered some surprise, for the IRA along with the Bipartisan
Infrastructure Bill and the CHIPS and Science Act are seen as industrial policy on a very large
scale. But, in these policies, the Japanese also see a signifcant opportunity to shif to Japan
parts of what now constitute China-US supply chains.

It should be noted that the IRA is not just about climate. Other elements include, in the words
of the White House, “making health care more afordable” (i.e., reducing drug costs in various
ways) and “strengthening enforcement against wealthy tax cheats and increasing recoveries
from delinquent millionaires” (i.e., $80 billion for the Internal Revenue Service).24

But the IRA is mostly about climate and energy, and there is a lot to it. The provisions are so
extensive that explicating them would take up a substantial part of this essay. But here are
some of the headline points:

• Expanded investment tax credits for wind and solar. Unlike the previous tax credits, which
needed to be renewed every two years, these tax credit provisions are long term and will
be impactful for decades.

• Similar credits for a wide range of technologies from carbon capture and direct air capture
to battery storage and biofuels, sustainable aviation fuel, and landfll gas.

• A major commitment to develop a “green hydrogen” industry, as well as a hydrogen

market—partially as a replacement for natural gas—with tax credits and the establish-
ment of hydrogen hubs.

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 • A new tax credit for “zero-emission nuclear power production” to support existing
nuclear electricity generation in the face of competitive pressures, as well as “clean
electricity” tax credits that would beneft new nuclear projects.

• $200 billion in new authority for grants and loans—the latter for technologies deemed
ready to scale but lacking the track record to pull in private sector investment.

• Interdependent incentives to create de novo an entire supply chain for EVs, from miner-
als and components to manufacturing to consumer (e.g., tax incentives for new vehicles
keyed to a rising share of domestic- or free trade–sourced minerals), all of this aimed at
reducing dependence on China, spurring domestic manufacturing of EVs, and, of essen-
tial importance, spurring consumers to buy them.

• Parallel support for solar manufacturing, with the same aim of reducing dependence on
China, which currently supplies 90 percent of solar wafers and 70 percent of the world’s
solar panels.

Then there are the octane-boosters. The tax incentives for projects can be further augmented if
those projects pay “prevailing wages” (i.e., union labor) or meet such “environmental justice”
objectives as targeting minority or poor communities or Indian lands. If all the add-ons are
met, the investment tax credits could, in some circumstances, cover a signifcant part of
the cost of a project. Moreover, the IRA seeks to stimulate further investment by allowing
tax credits to be traded and sold, with the aim of signifcantly widening the pools of capital
going into energy transition investments.

There are many other provisions—funding for the US Postal Service to buy zero emission
vehicles, funding for the Environmental Protection Agency (EPA) both to award labels for con-
struction materials deemed lower in embodied emissions and to fund “environmental justice”
grants. Altogether, according to one analysis, there are 90 separate funding provisions in
the IRA.25

At the time of its launch, the cost of the IRA for the US government was estimated at about
$369 billion over ten years. Subsequent estimates, according to the US Treasury, put the fscal
cost between $800 billion and $1.2 trillion dollars over the same period.26 Some estimates
range higher.

Climate and energy transition policy has also become trade policy. In addition, the IRA rep-
resents a new version of energy security policy, as it is aimed at reducing and/or eliminating
dependence on foreign—that is, Chinese—supply chains. As China came out of its extended
COVID-19 lockdown, its exports surged owing to what has been widely described as its
“industrial overcapacity.”27 This has added signifcantly to the already considerable trade ten-
sions between the China on one side and Europe and the United States on the other. For the
Biden administration, concern continued to rise that cheaper imports from China would under-
mine “green energy supply chains” and the trillions of dollars of investment slated to go into it.

12 DANIEL YERGIN U US ENERGY SECURITY

In 2024, the administration responded to the growth—and threat—of Chinese exports with
steep tarif hikes in order to protect those industries along with the investment the administra-
tion was making in them. Tarifs on Chinese electric cars were increased to 100 percent, and to
25 percent on EV batteries and critical minerals. “I’m determined,” the president said, “that the
future of the electric vehicles will be made in America by union workers.”28

The tarifs on Chinese solar panels were raised to 50 percent because, said the president,
“the Chinese government is subsidizing excess capacity, they’re fooding the market.” China
produces over half of the world’s entire steel output. President Biden put a 25 percent tarif
on steel and aluminum in order, he said, to protect, “the major investments” that “we’re
making . . . in clean American steel and aluminum” that emits “half as much carbon as steel
made in China.” He also announced a 50 percent tarif on semiconductors made in China
to protect the domestic industry and the multibillion investment that Washington is making
through the CHIPS and Science Act.29

But the efort to shield domestic industry will be challenged if Chinese manufacturing and
assembly expand in Mexico under the umbrella of the United States-Mexico-Canada Agreement.
However, renegotiation of that agreement is expected in 2026; and, in a charged political
environment, Mexico will be faced with a choice between Chinese manufacturing in Mexico
and access to the United States for 80 percent of its exports. It is noteworthy, however, that
Chinese imports now constitute about 20 percent of total new car sales in Mexico.

REGULATIONS AND MANDATES

Of course, the steps toward energy transition are not only about incentives—“carrots.” They
also involve regulations, rulemaking, and mandates. But given the discretionary nature of reg-
ulations issued by one administration, their longevity may depend on the policies of the next
administration. This uncertainty can undermine the confdence of investors.

THE KEYSTONE CASE STUDY

The risks and uncertainty that come with political variability are captured in the tortuous
saga of the Keystone XL pipeline. The proposed $9-billion project was launched in 2008
as a northern extension to the existing Keystone pipeline system that carries Canadian oil
to US refneries. It was designed to bring an additional 830,000 barrels of oil a day from the
Canadian province of Alberta across the US border and down to Oklahoma.

In 2012, when gasoline prices hit $4 a gallon, President Barack Obama hit the road and few to
Cushing, Oklahoma, to bless the construction of the southern section of the Keystone system.
“A company called TransCanada has applied to build a new pipeline that would speed oil from
Cushing to state-of-the-art refneries down on the Gulf Coast,” he said. “Today, I’m directing
my administration to cut through the red tape, break through the bureaucratic hurdles, and
make this project a priority to go ahead and get it done.” He added, “My administration has
approved dozens of new oil and gas pipelines over the last three years.”30

HOOVER INSTITUTION U STANFORD UNIVERSITY 13

 The proposed new part of the northern part of the pipeline system, Keystone XL, would
have added about one-half of 1 percent (0.5 percent) to the total length of the petroleum
liquids pipeline system in the United States. But it proved to be an extraordinarily contro-
versial one-half of 1 percent—with demonstrations and protests all along the proposed
route and in Washington, DC, where many people were arrested, including a famous climate
scientist who declared that the pipeline was the “fuse to the biggest carbon bomb on the
planet.”31

In 2015, afer a seven-year review that flled eleven volumes, the Obama administration
rejected the permit required to cross the Canadian-US border because an approval “would
undercut the credibility and infuence of the United States in urging other countries to put
forth ambitious actions and implement eforts to combat climate change.”32

But that decision did not stand all that long. Two years later, in January 2017, just four days
afer taking ofce, President Donald Trump reversed the decision and called for approval of
Keystone XL to be provided in an “expedited manner” because it “would serve the national
interest.”33 Then, almost exactly four years later, President Joe Biden, on his frst day in ofce,
revoked “the permit granted to the Keystone XL pipeline,” explaining that it would not serve “the
U.S. national interest.”34 Six months, later TC Energy—as TransCanada had been renamed—
fnally gave up, saying that it was winding down the project that it had announced thirteen
years earlier.

AUTO EMISSIONS AND PERMITTING

Regulations continue to be a battlefeld, especially as the Biden administration has rolled out
scores of new administrative and regulatory actions related to climate and industry over the
last few years. Automobiles are among the most contentious.

Auto emissions are regulated by the EPA and fuel efciency standards by the National Highway
Trafc and Safety Administration. In 2024, new standards were rolled out that would require
much tougher reduction of tailpipe emissions for new vehicles—already down by 99 percent
since the 1970s according to the EPA—and much greater fuel efciency—65 miles per gallon
by 2031 for passenger cars. These regulations would set further engineering challenges for
automakers. As noted earlier, this would make traditional cars more costly, thus making EVs
more competitive in terms of price and therefore more attractive to consumers. The end goal:
accelerate the penetration of EVs in line with Biden administration goals, with the anticipated
result that 68 percent of new vehicles would be EVs or plug-in hybrids by 2032.

In January 2024, the Biden administration announced a “pause” on the granting of permits
for new LNG export in order to study “potential cost increases” and, more centrally, to assess
“the impact of greenhouse gas emissions.” This came as a surprise to many, given the strate-
gic role of US LNG, the large fnancial commitments already made to new projects, and the
boost it would give to competing projects in other countries.35

14 DANIEL YERGIN U US ENERGY SECURITY

Permitting has become a vexing issue across the energy spectrum. One thing on which
both conventional energy and renewable companies agree is that the permitting system
in the United States is dysfunctional. It is challenging new wind projects. It is stalling the
development of new mines in the United States that can produce the minerals required for
electrifcation and reduce dependence on China. Getting through the permitting process
can take multiple years, adding signifcant costs, and then still be subject to further judicial
challenges; sometimes it seems destined never to end. Altogether, according to S&P Global
research, it can take nearly twenty-nine years to go from mineral discovery to production in
the United States.36 As US Senator Joe Manchin, chairman of the Senate Energy Committee,
put it, “America’s permitting process is broken, consumed by bureaucratic delays and end-
less litigation at every turn.”37

The overriding legislation that covers environmental permitting is the National Environmental
Policy Act (NEPA) of 1970. It requires “federal agencies to assess the environmental efects of
their proposed actions prior to making decisions.”38

In May 2024, the US Council on Environmental Quality published a new rulemaking—the so-
called NEPA Phase 2—to “simplify and modernize” the federal environmental review process.
Phase 2 is the response to a wide chorus of complaints about what sometimes seems the
almost endless—and expensive—NEPA process. As it turns out, however, Phase 2 moves
closer to a two-tier approach. For those projects deemed to reduce GHG emissions (e.g.,
renewable power projects or new electricity transmission lines), the review process is to be
simplifed and expedited. But, for conventional projects, the review process will be expanded
and made more complex, requiring evaluation of direct and indirect impacts on emissions
and climate, as well as community and environmental justice impacts. All this will further com-
plicate and stretch out the review process. Moreover, a natural gas project would face a new
test—having to prove that low-emitting alternatives (e.g., renewable power) could not just as
readily meet the expected demand. The Biden administration’s NEPA Phase 2 is encountering
ferce congressional opposition and the charge that it “rides roughshod over the bipartisan,
bicameral consensus on streamlining federal permits.”39

One can identify many other areas where national energy policy is really national climate
policy, ranging from ofshore leasing to new natural gas–fred power projects to require-
ments regarding home furnaces. And litigation is usually the follow-on to the publication
of the new regulations in the Federal Register. Many states are pursuing similar policies,
including mandates requiring growing shares of renewables in electric generation. New York
State has banned gas-fred stoves in new residential buildings under seven stories and,
afer 2027, in taller buildings. California has banned the sale of cars with internal combus-
tion engines by 2035, which is just a decade away. That state also requires that 90 percent of
its electricity come from renewables by that same year and is pledging a 94 percent drop in
state oil consumption in twenty years. At the same time, California is contending with elec-
tricity prices that are the highest in the continental United States and more than double the
national average.40

HOOVER INSTITUTION U STANFORD UNIVERSITY 15

 THE CHALLENGES

The IRA paints a picture of what the other side of a net zero energy transition would look
like—a new system composed of renewable power, biofuels and sustainable aviation fuel,
hydrogen, e-fuels, EVs, carbon capture and direct air capture, greater energy efciency, and
new materials. It is all meant to prepare a future that is highly electrifed, be it transportation,
buildings, or industrial processes.

But turning this picture into reality inevitably encounters real-world obstacles.

The Biden administration’s goal is that half of new vehicles sold in the United States by 2030
should be EVs. “New energy vehicles,” as Beijing calls them, have certainly taken of in China.
Their progress has been propelled by mandates, regulations, and incentives—all of that
underpinned by the government’s alarm about depending on imports for 75 percent of its
total oil supply and by the objective to be the dominant player in the world’s EV supply chain.
In the frst half of 2024, a ferce price war among Chinese companies helped drive sales of
new “new energy vehicles” toward 50 percent of total sales. In major European markets, the
rate of adoption has slowed—in Germany slipping from 26 percent in fourth quarter 2023 to
18 percent in frst quarter 2024 afer subsidies were removed. Overall, EV sales in Europe are
running at about 20 percent of total sales.41

It is a diferent story in the United States where, at least so far, EV penetration has been much
slower—9.5 percent of new car sales most recently. That divides into 7.2 percent for battery-
powered and 2.3 percent for plug-in hybrids. This rate of penetration is to the disappointment
of automakers, who are investing billions of dollars in preparing for the EV surge, and an admin-
istration that wants them to make that investment. Yet auto dealers complain about EVs sitting
on their lots unsold or only being sold at a loss. Some four thousand dealers signed on to a
letter to the Biden administration asking it to “hit the brakes” on the aggressive push for EVs and
protesting the tough new EPA emission standards that support the “electric vehicle mandate.”
Despite more generous incentives (some states top of the federal subsidies), many car buyers
have range anxiety and worry about availability of charging—which is being deployed at a slower
rate than anticipated—and are unpersuaded about the advantages of a full-battery EV over a
gasoline-powered or hybrid car. There’s also the matter of upfront costs and lower resale values.

Recent price cuts could bring in more buyers, as is happening in China. However, electric
cars in the United States now seem to face an obstacle that was unanticipated. They have
become caught up in what is widely described as the “culture wars” and what pollsters
describe as the “politization of EVs.” Their mandating is seen by some conservative voters
as an embodiment of progressive policies and values. In the meantime, to the surprise of
automakers, there is a renewed interest in what had seemed an “also-ran”—hybrids that
combine electric motors with gasoline engines.

Renewable power is on a fast track for growth, as already noted above. At this point, it is
anticipated that 70 to 80 percent of the new electricity generating capacity that will be added

16 DANIEL YERGIN U US ENERGY SECURITY

in the United States in the years ahead will be renewables—wind and solar, increasingly
backed up by battery storage. But that path is not as clear as it seemed a couple of years ago.
Wind’s advance has been hindered by what have been higher interest rates, supply chain
bottlenecks, and rising costs, along with permitting delays, local opposition, and judicial
challenges.42 Much-anticipated wind projects ofshore of the East Coast have been cancelled
or postponed owing to sharp increases in costs—or renegotiated with higher subsidies.
Suppliers of key components to the wind industry have been cautious in building up capacity
for fear of boom-and-bust cycles. As an example, special cabling required for ofshore wind
that is ordered in 2024 probably cannot be delivered until 2028 at the earliest. Further com-
plicating supply chains is the concern about potential political risks from using Chinese com-
ponents and equipment and the worry that contracts for future delivery of equipment may be
disrupted by new restrictions.

Another challenge is the need to assure afordable and available energy to the American
public. In its frst year in ofce, the Biden administration was unexpectedly faced with a
global oil market that was tightening, owing to the post-COVID global rebound in demand,
which in turn sent prices up. Just ten months afer entering the White House, President Biden
ordered a release from the Strategic Petroleum Reserve to put more supply into the market
to address what he called “the problem of high gasoline prices” and was urging oil compa-
nies to increase production.43

This occurred four months before Russia’s invasion of Ukraine, with the major disruptions
in oil and gas supplies that followed. The administration subsequently orchestrated further
releases from the Strategic Petroleum Reserve, which in total reduced the actual reserve by
45 percent. When Russia cut of natural gas pipeline supplies to much of Europe in Putin’s
drive to undermine support for Ukraine, the Europeans compensated for a major part of the
loss with much-increased imports of LNG, of which, as noted, 40 percent came from the
United States, processed from shale gas. In short, notwithstanding climate ambitions, the
requirements of demand and security have meant a renewed emphasis on ensuring the ade-
quacy of oil and gas supplies.

A new issue is emerging for the energy transition: ensuring the “reliability” of electricity
supplies—“reliability” being a subset of energy security. The Biden administration’s target is
carbon-free electric generation by 2035. Achieving that would require squeezing out natu-
ral gas and coal, which together currently constitute 60 percent of generation.44 Under that
rubric, the only way that natural gas could stay in the system is with big advances in carbon
capture on the part of gas producers and electricity generators.

That goal was predicated on the assumption that the future would resemble the past: over the
last ten years, the nation’s electricity demand has been almost fat, growing at just 0.35 percent
per year. But the last year or so has brought the realization that demand is now on a track
to grow much faster—S&P Global estimates almost 2 percent annually—taxing the current
infrastructure. Between 2022 and 2023, PJM, which manages electricity transmission in the
region stretching from Illinois to New Jersey and Maryland, doubled its long-term forecasts

HOOVER INSTITUTION U STANFORD UNIVERSITY 17

 for annual growth in electricity demand. One major utility in the southeast noted in April 2024
that its power demand was growing faster than forecast just seven months earlier. Many utili-
ties are substantially increasing their forecasted need for new generating and transmission
capacity.

Three factors have come together to fuel this coming but unanticipated ballooning of demand.
One is the mounting “energy transition demand”—from EV charging and the overall push
to electrifcation. The second is the impact from increased manufacturing resulting from
the CHIPs and Science Act, the IRA, and other incentives, and from the reshoring of supply
chains. But the most signifcant of all is the rapid growth of data centers and the cloud, crypto
mining, and the rollout of artifcial intelligence (AI). An AI search takes much more electricity
than a conventional Google or Bing search. Data centers will become major factors in total
US electricity usage, projected by the Electric Power Research Institute to grow from 4.6 per-
cent total electricity to as much as 9.1 percent by 2030.45 The number-one priority for siting
a data center has become assured access to reliable twenty-four-hour power. As Bill Gates
explained at CERAWeek, “Cloud companies . . . think about a data center” according to “its
power requirements. . . . A long time ago we’d say, ‘Oh, we have 20,000 CPUs—central pro-
cessing units. Now we just say, ‘This is a 300 megawatt data center.’”46

Meeting this surge will require a great deal of new investment. But implementing that will
require success in running a complex gauntlet of permitting processes, supply chain bottle-
necks, regulatory approvals, and challenges from consumer and environmental groups. It also
means that natural gas could end up playing a much larger role in meeting demand growth
and balancing the intermittency of wind and solar than had been contemplated when the
IRA was passed and the 2035 carbon-free target for electricity was laid down. That unantici-
pated role for natural gas is refected in the growing orders for natural gas turbines, as utilities
hasten to prepare for surge in consumption that was not in their plans two years ago.

However, natural gas will face a growing competitive challenge from the integration of batter-
ies into the electric power system and advances in battery chemistry—for batteries can store
surplus electricity produced by solar and wind when the sun is shining and wind is blowing
and then release that electricity when neither is operating. Widespread adoption of batter-
ies would help turn “intermittent” supply from wind and solar into “frm” supply over the entire
twenty-four hours.

But, overall, this growth in electricity demand comes with a major risk: any signifcant black-
outs or disruption of electricity supplies will have massive impact on, and lasting reverbera-
tions for, energy policy.

The surge in electricity demand is providing further momentum for the revival of nuclear power.
The IRA provides the aforementioned tax incentives to enable conventional nuclear power
plants to remain competitive—and operating. The lives of existing nuclear power plants are
being extended, but it is highly unlikely that any new large-sized conventional nuclear plants
will be built because of the perennial experience of cost overruns and regulatory delays and

18 DANIEL YERGIN U US ENERGY SECURITY

disruptions. The focus has now shifed to advanced designs and, in particular, small modu-
lar reactors. But deployment is probably not something that will happen before the 2030s.
Fusion has attracted billions of dollars in venture funding, and companies and research insti-
tutions are working on scores of advanced nuclear reactor projects. One constraint that only
recently is being addressed is a heavy dependence on Russia, which has 44 percent of world
enrichment capacity and has been supplying a third of US imports of uranium fuel. Legislation
passed in 2024 bans imports of Russian uranium beginning in 2028, but that leaves the ques-
tion as to where to source uranium.

FROM “BIG OIL” TO “BIG SHOVELS”

A further challenge involves the new supply chains required for the energy transition—what
I describe in The New Map as a shif from “Big Oil” to “Big Shovels.” In other words: more
mining and more minerals. The International Energy Agency has warned that the net zero
2050 target will “supercharge demand for critical minerals” as the world moves from a “fuel-
intensive to a mineral-intensive energy system.”47 This prospect has raised alarm for the US
government in that while “global demand for these critical minerals is set to skyrocket,” the
additional supply will fall far short of what is required “as the world transitions to a clean
energy economy.”48

But what is that risk? S&P Global has sought to quantify the requirements by focusing in
on copper, the “metal of electrifcation.” In order to meet climate and emission goals for
2050, its study concluded, world supply of copper would have to double by 2035.49 That is
extremely unlikely, owing to the fact that it can take twenty years on average globally to bring
on a new Tier 1 mine. There are not only the technical, engineering, and logistical challenges
for developing a mine. There are also the permitting and regulatory processes, compounded
ofen by opposition from environmental, political, and local groups. What is true for copper
also holds true for other minerals. Clearly, this spike in demand provides incentives to apply
technology to wrest increased output from existing mines, despite declining ore qualities, as
well as for innovation in new materials, new battery designs, substitution, and recycling. But
all of that takes time to develop and get to scale.

But it’s not just physical supply when it comes to minerals. It’s also geopolitics—particularly
rising tensions between the United States and China. Chinese state-owned companies are
among the leaders in mining around the world. Even more than that, China dominates pro-
cessing of minerals into metals. China, for instance, mines 90 percent of rare earth minerals
and processes 60 to 70 percent of cobalt and lithium ore.50 The United States has taken the
lead in establishing a Minerals Security Partnership with thirteen other countries to “diver-
sify supply chains,” but that is challenging given lead times, investment needs, opposition to
mining, complex and time-consuming permitting processes, and environmental challenges to
the kind of industrial facilities that can turn ores into usable metals. In sum, how the growing
demands of energy transition will match up with the limits of mineral supply will be a major
test—and potentially a signifcant constraint.

HOOVER INSTITUTION U STANFORD UNIVERSITY 19

 REGULATION AND THE END OF THE CHEVRON DEFERENCE
For decades, energy and environmental regulation by federal agencies has been guided by
“Chevron deference,” a doctrine resulting from a 1984 Supreme Court decision that regula-
tory agencies have “precedence” in interpreting ambiguous or unclear federal legislation—or
on which legislation is “silent.” By one count, more than eighteen thousand court decisions
have been based on Chevron deference in the four decades since.51 While it had somewhat
eroded over time, Chevron had remained the law of the land.

No longer. In a highly consequential decision—Loper Bright v. Raimondo—the Supreme Court

ruled on June 28, 2024, in a 6 to 3 vote, that it is up to judges to decide what the law says,
not regulators. Writing for the majority, Chief Justice John Roberts said that it is “the respon-
sibility of the court to decide whether the law means what the agency says” and that courts
are meant to “decide legal questions by applying their own judgment.” Writing for the minor-
ity, Justice Elena Kagan declared that the decision “will cause a massive shock to the legal
system” by giving judges, who lack technical expertise, “exclusive power over every open
issue—no matter of how expertise-driven or policy-laden.”52

The end of Chevron deference will inevitably mean a new legal order of litigation and with
that more uncertainty. The authority of agencies to issue energy and environmental rules and
regulations, as in other regulatory realms, will be subject to much more extensive review by
numerous federal judges throughout the country. Regulators may no longer be able to require
“climate impact” evaluations without explicit legislative authorization. Less well recognized
is that the decision allows other experts to present their views on an equal basis, as in other
litigation. In other words, the court would accord scientists from a university or a national
laboratory the same “expert” status as those from the regulatory agency, which is now not
the case. As one analysis concluded, “The end of Chevron deference implies a new era of
volatility in the legal and regulatory landscape for US energy and climate policy. Everyone
from projects developers and operators to investors and local stakeholders should prepare
accordingly. . . . The ruling undermines [the Biden’s administration’s] sweeping regulatory
eforts toward economy-wide decarbonization.” The decision will inevitably have an impact
on aspects of the IRA.53 In another decision three days later, Corner Post, the Court further
changed the landscape, opening the door to a litigation challenge well more than six years
afer promulgation of a regulatory action, which is now ofen taken as the limit.

THE NEXT ADMINISTRATION

The greatest uncertainty is looming—the outcome of the 2024 presidential election, as well
as elections for the Senate and House of Representatives. The Democratic and Republican
Parties, obviously, have dramatically opposed positions on environmental and energy issues.

However, the question is no longer what a second Biden administration would do but rather a
frst Harris administration. During her campaign for president in 2019, Kamala Harris was much
in keeping with the progressive wing of the Democratic Party. She pledged both a “ban” on
fracking and on new fossil fuel infrastructure, released a $10 trillion plan for net zero, and

20 DANIEL YERGIN U US ENERGY SECURITY

promised to prosecute oil companies for their “accountability” on climate. She endorsed the
Green New Deal and subsequently co-sponsored it as legislation. She also introduced a bill
requiring an “equity” scoring on energy and environmental legislation, meant to parallel the
Congressional Budget Ofce’s scoring of spending costs of legislation.

Once she became Joe Biden’s 2020 running mate, she shifed on shale. “Without any ambigu-
ity, Joe is clear,” she said during the 2020 campaign. “We will not ban fracking.”54 Four years
in the White House reinforced the shif. As her 2024 race got underway, the Harris campaign
sought to distance her from positions taken in 2020, notably now saying she “will not seek
to ban fracking.” In August 2024, she explained, “What I have seen is that we can grow and
we can increase a thriving clean energy economy without banning fracking.”55 A prohibition
on fracking, if actually implemented, would mean that the United States would be importing
almost 80 percent of its natural gas and almost 70 percent of its oil and, as a result, competing
with China to be the world’s largest oil importer. The geopolitics are clear: no one would ben-
eft more from a ban on fracking than Vladimir Putin, for it would press Europe back to import-
ing Russian pipeline gas and push Japan to increase imports of Russian LNG. It was also clear
that a prohibition would be poorly received in the swing state of Pennsylvania, which is ben-
efting economically from shale.

During the Biden administration, Harris has been characterized as a “climate diplomat.” That
is certainly the role she played at the COP 28 Conference in Dubai in December 2023. “We
must treat the climate crisis as the existential crisis that it truly is,” she said in Dubai. “The
clock is no longer just ticking; it is banging.” As president, she would certainly promote a
“whole-of-government” doubling down on climate action, both domestically and internation-
ally, with a stronger emphasis on “equity.” A new departure is likely to be a focus on what one
current Biden policymaker has called “the elephant in the room”—the emissions associated
with world trade. The aim would be to rebuild the “current global trading system . . . to curb
emissions” and revise “international economic systems, including trade—and harness them
for climate action.”56 This points to what in Europe is called a “carbon border adjustment
mechanism,” essentially a carbon tarif.

On climate policy overall, what could not be achieved through Congress would be sought
through more regulation and administrative action, although the end of Chevron deference
could limit the administrations’ ability to do so. Harris has indicated that implementing the
IRA will be a central vehicle for meeting her administration’s goals. And the IRA bears her sig-
nature as well as Biden’s. When the IRA came to a vote in the Senate, it was a tie—50 to 50.
As president of the Senate, Harris broke the tie, casting the deciding vote that made it a law. As
she lef the Senate foor, she declared, “This is a great day.”57

For Donald Trump, that was not a great day. There would be no such continuity with a Trump
victory in 2024. As the transition from Obama to Trump and then Trump to Biden brought
abrupt changes in direction, so would be the case with a second Trump administration.
Climate would no longer be the organizing principle of energy and environmental policy.
While the Republican platform does not mention “climate,” it does pledge to “unleash Energy
Production from all sources, including nuclear,” and promises to terminate “the Socialist

HOOVER INSTITUTION U STANFORD UNIVERSITY 21

 Green New Deal.”58 As Trump in 2017 and then Biden in 2021 each looked for high-visibility
“frst days” symbolic events, so would a new Trump administration. Trump has already indi-
cated what one initiative would be: “I would end the Electric Vehicle Mandate on day one,
thereby saving the US auto industry from complete obliteration,” he said.59 He has said
he will once again withdraw the United States from the Paris Agreement. He’s also likely to
immediately revoke the “pause” on granting LNG licenses and to launch opposition to ESG
investing and ESG corporate disclosures. A second Trump administration is very likely to
do something it did not do in the frst administration—review the US engagement with the
International Energy Agency, which House Republicans have criticized for, they say, shifing
away from its “core energy security mission towards radical climate policy advocacy.”60

But what happens to the Biden administration’s biggest signature legislation, the Infation
Reduction Act? The IRA, said Trump, “has nothing to do with infation reduction” but “much
more to do with the green new scam, which is what it really is.”61 Yet the IRA is a law and, unless
repealed, will remain so. It is a Democratic law, in that no Republican member of the Senate or
House of Representatives voted for it. How much of that partisan opposition would be ofset
by the subsequent implementation would be one of the open questions. Much of the money is
going to “red states,” and Republican governors have been supportive of those fnancial fows
into their states. Moreover, the agnostic nature of the IRA means that a broad range of com-
panies are engaged, and thus a wide range of workers, and it is drawing signifcant investment
into the United States from non-US companies. The law, while remaining in place, could be
amended or diferently implemented in practice. There would be much fexibility on spending
and discretion on how money is programmed or redirected or reduced, and on the application
or continuation of various tax credits.

CONCLUSION: HOW FAST?

Over the last decade and a half, the United States has developed a much stronger position in
terms of energy security. This is the result of multiple factors: the shale revolution, which has
completely reversed the country’s relationship to global oil and gas markets; the advances in
wind and solar; greater efciency in use of energy; and an innovation ecosystem that contin-
ues to open new doors.

But risks are certainly still there. The United States remains integrated into global markets
and is vulnerable to disruptions and crises in those markets. Cyberthreats to energy infra-
structure are a growing concern. Rising tension between the United States and China puts a
spotlight on the concentration of minerals supply chains. The resilience and reliability of the
electric power system has always been a primary concern. But the increasing electrifcation
of the overall economy—central to the energy transition—means that resilience becomes an
even greater priority. How quickly and to what extent and in what ways will America’s energy
system change? Wind and especially solar are being deployed at rapid rates. Yet, overall, as
noted earlier, between 2022 and 2023 the share of hydrocarbons in total US energy declined
by just four-tenths of 1 percent—from 81 percent to 80.6 percent. Given that the system is still
over 80 percent based on hydrocarbons, one has to conclude that, despite the formidable
engines of policy, this moment is still early in the transition.

22 DANIEL YERGIN U US ENERGY SECURITY

The answers about the pacing and nature of change will emerge from the convergence of
policy and public opinion, technology and innovation, fnance and economics, the robust-
ness and fexibility of supply chains—and geopolitics. The wide range of uncertainty can be
indicated in just two of these elements. In terms of technology and innovation, how quickly
will batteries improve both for cars and for electricity storage, how quickly will new data cen-
ters become less electricity-intensive than now anticipated, how quickly will the cost come
down for the electrolyzers needed to make green hydrogen? In terms of geopolitics, will rising
geopolitical tensions disrupt global supply chains for minerals and trigger unexpected cyber-
induced disruption in electricity supplies?

In short, there is no clear-cut answer to the question of how quickly and in what ways America’s
energy system will change. As would be expected, there are many diferent perspectives. Yet
one informed view was provided by Joe Biden in an unscripted comment that he added during
his 2023 State of the Union address: “We’re going to need oil at least for another decade . . .
and beyond that,” he said. A week later, for clarity’s sake, he elaborated, “We’re going to need
oil for a long time, gas for a long time. It’s not going to . . . go away.”62 But how long is long?
That is up to time to tell.

NOTES
1. Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Simon and Schuster,
2011), chaps. 29 and 30.
2. Daniel Yergin, The New Map: Energy, Climate and the Clash of Nations (New York: Penguin, 2021), 12.
3. The ban on exporting refned products like gasoline and jet fuel had been lifed in 1981 with no fanfare.
Yergin, The New Map, 53–55.
4. American Chemistry Council, “US Chemical Industry Investment Linked to Shale Gas Tops $200 Billion,”
press release, May 6, 2022, https://www.americanchemistry.com/chemistry-in-america/news-trends/press
-release/2022/us-chemical-industry-investment-linked-to-shale-gas-tops-200-billion.
5. Paul Dabbar, “US Energy Superpower Status and a New US Energy Diplomacy,” Hoover Institution, 2024,
https://www.hoover.org/sites/default/fles/research/docs/Dabbar_WebreadyPDF.pdf.
6. At this conference, which was before the annexation of Crimea, I was set to ask the frst question afer
Putin and Chancellor Angela Merkel fnished their remarks. My query was about the overdependence of
the Russian budget on oil and gas, but I started by mentioning “shale.” See Yergin, The New Map, 58–59.
7. Energy Institute, Statistical Review of World Energy 2024, 73rd ed., https://www.energyinst.org/__data
/assets/pdf_fle/0006/1542714/EI_Stats_Review_2024.pdf.
8. See Yergin, The New Map, chap. 37.
9. Energy Institute, Statistical Review of World Energy 2024.
10. Share of hydrocarbons comes from the Energy Institute, Statistical Review of World Energy 2024. Energy
mix from Monthly Energy Review, which shows share of hydrocarbons in total US energy mix slightly higher,
at 82.5 percent.
11. All these are from the Monthly Energy Review published by the US Energy Information Administration.
12. S&P Global forecast.
13. “Unpacking China’s GDP,” ChinaPower Project, last updated June 5, 2024, https://chinapower.csis.org
/tracker/china-gdp/.
14. International Energy Agency, The Oil and Gas Industry in Net Zero Transitions, December 2023
(rev. February 2024), https://iea.blob.core.windows.net/assets/f065ae5e-94ed-4fcb-8f17-8cefde8bdd2
/TheOilandGasIndustryinNetZeroTransitions.pdf.

HOOVER INSTITUTION U STANFORD UNIVERSITY 23

 15. The White House, “Statement by President Trump on the Paris Climate Accord,” June 1, 2017, https://
trumpwhitehouse.archives.gov/briefngs-statements/statement-president-trump-paris-climate-accord/.
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2023, https://www.whitehouse.gov/briefng-room/speeches-remarks/2023/11/14/remarks-by-president
-biden-on-actions-to-address-the-climate-crisis/.
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18. The White House, “FACT SHEET: One Year in, President Biden’s Infation Reduction Act Is Driving Historic
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-arrested-keystone-xl-pipeline-protests-oil-sands-climate-change-obama/.
32. Yergin, The New Map, 46–48.

24 DANIEL YERGIN U US ENERGY SECURITY

33. The White House, “Presidential Memorandum Regarding Construction of the Keystone XL Pipeline,”
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CRA Resolution of Disapproval to Overturn NEPA Phase II Final Rule,” June 18, 2024, https://www.energy
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Use Sector,” Electric Power Monthly, May 2024, https://www.eia.gov/electricity/monthly/epm_table_grapher
.php?t=table_5_06_a.
41. Jef Meyer and Yajie Zhao, “Pulse of Change: BEV and PHEV Sales Update,” S&P Global Commodity
Insights, August 2024.
42. Ben Levitt and Sankalp Garg, “States Fight Local Opposition to Renewables Development in the US,”
S&P Global Commodity Insights, March 28, 2024.
43. Ben Lefebvre, “Biden Acts to Lower Fuel Prices—with Help from GOP,” Politico, November 23, 2021,
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44. As late as 2000, coal had been 52 percent of generation, partly refecting previous government policy
promoting coal for power generation because of cost and energy security.
45. Ben Levitt, Callie Kolbe, and Morganne Blaylock, “Datacenters Provide a Boost to Total US Gas Demand
in the Near Term, but Longer-Term Prospects Are More Uncertain,” S&P Global Commodity Insights,
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-centers-and-the-coming-us-power-surge/report.pdf.
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.iea.org/reports/energy-technology-perspectives-2023/clean-energy-supply-chains-vulnerabilities.

HOOVER INSTITUTION U STANFORD UNIVERSITY 25

 51. Rich Gold, Lynn E. Calkins, Christine N. Walz, Christopher R. Nolan, Anita M. Mosner,
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26 DANIEL YERGIN U US ENERGY SECURITY

The publisher has made this work available under a Creative Commons Attribution-NoDerivs
license 4.0. To view a copy of this license, visit https://creativecommons.org/licenses/by-nd/4.0.

Copyright © 2024 by Daniel Yergin

The views expressed in this essay are entirely those of the author and do not necessarily refect the
views of the staf, ofcers, or Board of Overseers of the Hoover Institution.

30 29 28 27 26 25 24 7 6 5 4 3 2 1

HOOVER INSTITUTION U STANFORD UNIVERSITY 27

 ABOUT THE AUTHOR

DANIEL YERGIN
Daniel Yergin is vice chair of S&P Global and chair of CERAWeek. His newest
book is The New Map: Energy, Climate, and the Clash of Nations. He received
the Pulitzer Prize for The Prize: The Epic Quest for Oil, Money, and Power and
was awarded the frst James Schlesinger Medal for Energy Security from the
US Department of Energy. His other books include The Quest: Energy, Security,
and the Remaking of the Modern World and The Commanding Heights: The
Battle for the World Economy.

About the Tennenbaum Program for Fact-Based Policy

The Tennenbaum Program for Fact-Based Policy is a Hoover Institution initiative that collects and analyzes
facts and provides easy-to-digest nontechnical essays and derivative products, such as short videos, to
disseminate reliable information on the nation’s highly debated policy issues. Made possible through the
generosity of Suzanne (Stanford ’75) and Michael E. Tennenbaum and organized by Wohlford Family Senior
Fellow and Stanford Tully M. Friedman Professor of Economics Michael J. Boskin, the program convenes
experts representing a diverse set of policy perspectives, writing in tandem, to better inform not just
policymakers and other stakeholders but also, most importantly, the general public.

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