DAVID BLACKMON: Only Congress Can Reverse Instability Regulating Energy Projects

Energy companies doing business in the United States increasingly cite diminished stability in the U.S. regulatory system as making it harder to finance and execute big domestic projects. It is a complaint I’ve heard from every executive I’ve interviewed since 2021, one that was recently echoed by the head of Shell Americas, Colette Hirstius.

“I think uncertainty in the regulatory environment is very damaging,” Hirstius said. “However far the pendulum swings one way, it’s likely that it’s going to swing just as far the other way.”

Hirstius’s observation is spot-on. Regulatory certainty and faith in the uniform application of prevailing laws across multiple presidencies of both parties is crucial for management teams to properly plan their companies’ business. This is especially important as it relates to major projects that require the allocation of billions of dollars in capital and years to complete. From oil and gas, to mining, to LNG exports, to nuclear power plants, to big wind and solar developments, such major projects are increasingly common in the U.S. as demand for all kinds of energy expands.

The U.S. enjoyed a high degree of regulatory and legal certainty for many decades, a happy fact that gave it a competitive advantage over other and less stable countries. That competitive edge enabled energy companies to attract billions of dollars in investment from sources all over the world to provide capital for U.S.-based projects.

But that all began to fade with the advent of the Obama administration and President Barack Obama’s oft-stated desire to “transform this country.” The radical climate agenda implemented in 2009 and expanded upon during the Joe Biden years helped produce voter backlashes in both 2016 and 2024, leading to the back-and-forth regulatory tug-of-war with both Trump presidencies.

The net result is that it is harder today to attract capital to any energy-related project in the U.S. than it had been prior to 2009, and the challenges of properly planning future projects and investments have, to no one’s surprise, expanded apace. The record inflation and chronic supply chain issues that characterized the Biden years only added to the complexity and uncertainty for management teams as they attempted to plan and execute their big projects.