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The All-of-the-Above Energy Strategy as a Path to Sustainable Economic Growth

Posted by Content Coordinator on Monday, June 2nd, 2014

EXECUTIVE OFFICE OF THE PRESIDENT OF THE UNITED STATES

Executive Summary 

The U.S. energy sector is undergoing a profound transformation. The United States is producing more oil and natural gas, is generating more electricity from renewables such as wind and solar, and is consuming less petroleum while holding electricity consumption constant. These developments have had substantial economic and energy security benefits, and they are helping to reduce carbon emissions in the energy sector and thereby tackle the challenge posed by climate change. 

To build on this progress, to foster economic growth, and to protect the planet for future generations, the President has set out an aggressive All-of-the-Above strategy on energy. Some of the recent trends in the energy sector predate the Administration and stem from technological advances and risk-taking by American entrepreneurs and businesses, as well as from government-supported research and other public policies. The All-of-the-Above energy strategy supports these trends through environmentally responsible production of oil and natural gas. In addition, the Administration has advanced the growth of energy sources with low or zero carbon emissions through programs that support wind, solar, other renewables, and nuclear, and has also helped to reduce energy demand by promoting energy efficiency. The Administration is also supporting an ambitious program of carbon capture, utilization and storage for coal and natural gas power plants and for industrial facilities. 

The All-of-the-Above energy strategy has three key elements: to support economic growth and job creation, to enhance energy security, and to deploy low-carbon energy technologies and lay the foundation for a clean energy future. This report lays out these three elements of the All-of-the-Above energy strategy, and takes stock of the progress that has been made to date and the work that remains to be done. 

The recent transformation in the domestic energy sector has been historic. 

  • Decades-long trends in energy use are being reversed. Natural gas consumption has risen 18 percent since 2005. In addition, total energy obtained from wind, solar, and geothermal sources has more than doubled since 2009. 
  • Many of these changes are largely unforeseen. Only eight years ago, baseline projections showed steadily increasing petroleum consumption well into the future. But the Energy Information Administration now projects petroleum consumption to decline starting after 2019. In fact, since its peak in 2007, U.S. gasoline consumption has fallen by 5.5 percent, or half a million barrels per day. 

The energy sector has provided key support to the recovery from the Great Recession, and the U.S. economy’s exposure to abrupt adverse changes in world oil markets should continue to decline.

  • Rising domestic energy production has made a significant contribution to GDP growth and job creation. The increases in oil and natural gas production alone contributed more than 0.2 percentage point to real GDP growth in both 2012 and 2013, and employment in these sectors increased by 133,000 between 2010 and 2013. Tens of thousands more jobs have been created in the solar and wind industries. These figures do not account for all the economic spillovers, so the overall impact on the economy of this growth in oil and gas production is even greater. 
  • Excluding the crisis-affected year of 2009, the U.S. trade deficit as a percent of GDP is the lowest since the 1990s. Since its 2006 peak, more than a fifth of the narrowing of the trade deficit as a percent of GDP can be directly attributed to a shrinking trade deficit in petroleum products, as rising domestic production and declining domestic consumption have combined to cut oil imports. 
  • The resilience of the economy to international supply shocks—macroeconomic energy security—is enhanced by reducing spending on net petroleum imports and by reducing oil dependence. The factors that have reduced net oil imports—decreased domestic petroleum demand, increased domestic oil production, more efficient vehicles, and increased use of biofuels—reduce the vulnerability of the U.S. economy to oil price shocks stemming from international supply disruptions. Although international oil supply shocks and oil price volatility will always present risks, empirical evidence presented in this report suggests that further reductions in net petroleum imports will reduce those risks. 
  • The United States has emerged as the world’s leading producer of petroleum and natural gas. In 2013, combined production of petroleum, natural gas, and other liquid fuels in the United States exceeded that of Saudi Arabia and Russia. The United States leads in natural gas and is predicted by the International Energy Agency to lead in oil as well within a few years. 

The President’s All-of-the-Above Energy Strategy will sustain and strengthen this important progress, while deploying low-carbon technologies and laying the foundation for a clean energy future. 

  • The United States has reduced its total carbon pollution since 2005 more than any other nation on Earth. While energy-related CO2 emissions have fallen 10 percent from their peak in 2007, recent projections suggest that emissions could begin to increase again, and more work remains to address this critical imperative. In his 2013 State of the Union address, the President again called on Congress to pass legislation that would provide a market-based mechanism for reducing emissions. Absent a market-based solution, a central goal of national energy policy is to develop and to deploy low-carbon technologies that the market would not otherwise undertake because of the externality of greenhouse gas emissions. 
  • The President’s All-of-the-Above Energy Strategy embraces natural gas as a transitional fuel, and includes steps to ensure that natural gas development is done responsibly. Natural gas is comparatively cleaner than many other sources of energy. And while extraction of natural gas raises some environmental concerns, including fugitive methane emissions, the Administration is supporting safe and responsible development including a strategy to address gaps in current data on methane emissions, to reduce “upstream” methane emissions, and—as part of the Quadrennial Energy Review—to identify “downstream” methane reduction opportunities. 
  • The All-of-the-Above Energy Strategy supports renewables, nuclear, and other zero-carbon energy sources through research, development, and deployment, and also invests in energy efficiency. The Interior Department is on track to permit enough renewable energy projects on public lands by 2020 to power more than six million homes; the Defense Department has set a goal to deploy three gigawatts of renewable energy—including solar, wind, biomass, and geothermal—on Army, Navy, and Air Force installations by 2025; as part of the Climate Action Plan, the Federal Government committed to sourcing 20 percent of the energy consumed in Federal buildings from renewable sources by 2020; and the Energy Department supports clean energy technology development and cost reduction across the innovation chain, including through significant loan guarantees and demonstration projects to promote nuclear, renewables, efficiency, and clean coal technologies. 

Figure 1-1: U.S. Crude Oil Production and Net Imports

Download full version (PDF): The All-of-the-Above Energy Strategy as a Path to Sustainable Economic Growth

About the Executive Office of the President of the United States
www.whitehouse.gov/administration/eop
Every day, the President of the United States is faced with scores of decisions, each with important consequences for America’s future. To provide the President with the support that he or she needs to govern effectively, the Executive Office of the President (EOP) was created in 1939 by President Franklin D. Roosevelt. The EOP has responsibility for tasks ranging from communicating the President’s message to the American people to promoting our trade interests abroad.

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