America’s approach to energy security has historically relied on market forces rather than heavy government intervention. This strategy is being reconsidered in light of recent global events, including the conflict between Israel and Iran, which raised concerns about the potential closure of the Strait of Hormuz—a key route for a significant portion of the world’s oil and gas.
Recent research indicates that the United States is now more resilient to global oil price shocks than it was two decades ago. In 2025, the country’s economy can better withstand higher oil prices compared to 2005. This improvement in energy security is largely attributed to increased domestic production. The United States shifted from importing 12.5 million barrels per day of oil and petroleum products in 2005 to exporting 2.3 million barrels per day by 2024. Natural gas production has also more than doubled since 2005.
Technological advances such as fracking and directional drilling have played a role in unlocking new resources, but experts argue that the broader conditions fostering innovation were just as important. Directional drilling technology existed since the 1970s but only gained widespread use when rising energy prices in the 2000s made its application economically viable.
The profitability threshold for shale extraction has decreased over time due to what economists call “knowledge spillover,” where early adoption leads to cost reductions as technologies become more common. By not interfering with industry profits during high-price periods or bailing out companies during downturns, federal policy allowed competition and innovation to thrive.
This approach echoes actions taken during President Reagan’s administration, when he removed price controls on oil that had been imposed during previous crises. At the time, some media outlets predicted disaster for gasoline prices, but pump prices eventually fell following deregulation.
Current policies emphasize government intervention through tools like the Defense Production Act and emergency authorities under various federal acts. Critics argue this encourages industries to seek special treatment rather than compete on merit, potentially undermining long-term productivity.
Advocates for a market-led approach suggest reforms such as improved permitting processes, reduced subsidies and mandates, and greater access for private companies to federal energy resources. They believe these steps would allow competition to deliver greater abundance and strengthen U.S. energy security both domestically and internationally.
“If the administration embraces this philosophy—which was pursued with great success during the first Trump administration—we will all be more energy secure.”
