The Crossroads
We are at a crossroads with energy. The US has made a decision at these crossroads - a decision that will affect the US economy, the geopolitical power the US holds on the global landscape, and most critically, the price of oil and non-oil energy sources for everyday American consumers.
Before we begin to understand this decision, let’s look at a reference point in history - an example of a country defining and executing its energy goals. Roll back your clocks to Soviet Russia in the 1960s.
During this period, the economy of the Union of Soviet Socialist Republics (USSR) was struggling immensely. The country was in grave need of essentials such as food and clothing for its people. The USSR’s largest export at the time, oil. Oil accounted for approximately two-thirds of the country’s total exports.
From the 1960s through the 1980’s, under significant pressure to generate hard currency for its people, the USSR stayed afloat largely due to favorable global oil market conditions rather than economic strength. Embargoes in the Middle East during the 1970s drove prices sky high, boosting Soviet export revenue and allowing the state to purchase goods and retain power. There’s a saying, “a rising tide lifts all boats.” After the 1980s, tides changed. Oil prices fell, the economy struggled, reforms failed to reverse decline, and the combination of economic weakness and rising nationalistic movements ultimately led to the dissolution of the USSR in 1991.
In hindsight, we can use this example to understand where the USSR went wrong in its energy strategy and what the country was optimizing for during this time period. The two primary pillars of the USSR’s energy strategy were: first, oil control; and second, government profit. Due to these pillars, the oil industry was structured horizontally. One government organization owned oil drilling. another owned transportation (e.g., pipelines), another controlled refining and sales, and so on.
Pillar 1 - oil control: organizations that only drill and do not have the ability to transport or sell oil independently enable centralized oil control by the government. Power is intentionally limited locally and allows for transparency at each step in the supply chain - from drilling to sale - increasing oversight and centralizing authority
Pillar 2 - government profit: the government ensures profits by setting quotas at each stage of the supply chain, limiting revenue leakage from unauthorized sales or side channels (e.g., if a drilling organization attempts to sell oil outside the prescribed system)
From the 1960s through the 1980’s, the USSR made the wrong decision at its crossroads. The country should not have prioritized top-down control as its primary pillar, but instead should have focused first on maximizing productivity and profitability. This alternative approach would have favored a vertically integrated and partially privatized structure.
Specifically, such a system - where a single company manages everything from drilling to sales rather than separate functions across government entities - can identify and solve bottlenecks across the supply chain more efficiently (e.g., investing in pipeline capacity, optimizing transportation routes, or tailoring sales strategies). A horizontal system limits information sharing, reduces incentives for bottleneck innovation, and ultimately suppresses efficiency and profitability. This extreme example illustrates that selecting the right pillar behind an energy strategy is critical to a nation’s long-term stability. It also shows us that there are more factors affecting a nation’s energy goals than we might expect. The USSR’s emphasis on control over performance proved costly, and over decades, that choice brought the country to the end of its crossroads.
Fast forward to the US, today. On January 20th, 2025, the White House released an executive order titled “Unleashing American Energy,” outlining the administration’s energy strategy for the years ahead.
I’ll spare you the exciting read - here is the link for the sceptics. The US is focused on the following 2 pillars (in priority order):
Pillar 1 - Establishing the US as a global energy leader:
Key point: not a clean energy leader, but a total energy leader
This means minimizing long-term US reliance on foreign energy sources, primarily in the name of geopolitical strength and national energy security
Pillar 2 - Rolling back regulation and clean energy incentives governing energy development and non-fuel material extraction (e.g., rare earth minerals):
Key point: allowing market forces to dictate energy investment without preferential incentives for EVs or clean energy technologies
Breaking down these pillars individually. The focus on becoming a global energy leader deprioritizes near-term strategies that could accelerate a cleaner energy system over the next 50 years. The emphasis is instead on geopolitical strength in the near term. This prioritization of immediate power over long-term sustainability mirrors the USSR’s historical decision to prioritize control over efficiency; and it is an intentional decision.
The second pillar - deregulation - makes this intent explicit. Section 7 of the executive order outlines the termination of the Green New Deal framework and an immediate pause in the disbursement of funds from the Inflation Reduction Act of 2022 and the Infrastructure Investment and Jobs Act of 2021. For context, these acts represented the largest federal investment in clean energy, electric vehicles, and grid infrastructure in US history.
This is where the distinction between the current administration’s pillars and those of the prior administration become clear. Today’s framework emphasizes international strength and minimal government intervention, while the prior administration prioritized clean energy development first and government-led economic and geopolitical strength second.
By examining the USSR’s choices and the pillars of the past administration, we can better understand how energy goals are formed - maybe it is less about what an administration wants and more about what it fears. Just as the USSR prioritized control in response to the pressures of its era, today’s US energy priorities reflect concerns about global competition, supply chain vulnerability, and national energy security.
One question remains. Which set of pillars will leave the US - and everyday American consumers - in the strongest position when we reach the end of these crossroads?
