WASHINGTON DC (1/15/26) – Today, the Institute for Energy Research released an updated edition of its Environmental Quality Index (EQI) report. The EQI compares the environmental performance of the world’s major producers of natural gas, oil, and coal.
Institute for Energy Research President Tom Pyle released the following statement:
“This report’s hard data confirms the straightforward reality that free-market economies deliver better environmental results while helping countries like the U.S. lead the world in energy production. Venezuela’s ongoing crisis provides a stark real-world example of how state-controlled energy policies, marred by political dysfunction, lead to environmental harm and economic decline.
“Restricting U.S. energy production does not reduce worldwide energy demand; it simply transfers production to countries with significantly weaker environmental protections and human rights records. The EQI data clearly shows that America’s economic freedom and strong institutions drive increased energy output alongside improved environmental quality and broader social and economic gains.”
Highlights from the report show:
U.S. energy production consistently reflects higher environmental standards across all major fuels.
- U.S. oil, natural gas, and coal production all occur under substantially higher environmental standards than the global norm. With an environmental score of 57.2, the United States sits more than 9 points above the production-weighted average for major oil producers and over 7 points above the global average for natural gas. The same pattern holds for coal: U.S. performance exceeds the global production-weighted average by more than 18 points. This underscores the considerable gap between U.S. environmental standards and the world’s other major energy producers.
Nations with stronger economic and political freedom tend to have higher environmental performance.
- Countries with higher levels of economic and political freedom consistently achieve stronger environmental outcomes. Illustrative cases such as Venezuela, Russia, and China demonstrate how authoritarian systems often lead to environmental degradation, weak property rights, and limited transparency, including persistent underreporting of pollution. As a result, reducing U.S. energy production would shift production toward countries with poor environmental safeguards and fragile institutional frameworks.
Several structural advantages help explain America’s superior environmental outcomes.
- Roughly 75% of U.S. oil and 87% of natural gas come from non-federal lands, where private ownership encourages efficient development. Technological advances such as horizontal drilling have increased natural gas production by about 46% over the past decade while reducing the environmental footprint. Since 1970, the United States has also cut major air pollutants by 78%, even as GDP expanded by 321% and energy consumption grew by 42%.
California’s approach to meeting its energy needs clearly illustrates why this matters.
- Substantial in-state resources exist in California, but regulatory limits on production and refining have reduced output; the state now imports nearly two-thirds of its crude oil. Because much of this supply comes from countries with lower environmental performance, the emissions associated with meeting California’s demand occur outside the state’s regulatory environment rather than being eliminated altogether. This reliance on external suppliers also introduces transportation and cost pressures and can leave the state more exposed during periods of market or infrastructure disruption. California’s experience illustrates how constraints on domestic production can reshape sourcing patterns in ways that do not align with environmental or consumer interests.
IER Experts Available For Interview On This Topic:
- Tom J. Pyle, President
- Kenny Stein, Vice President of Policy
- Alex Stevens, Manager of Policy and Communications
- Will Rampe, Policy Analyst
Additional Background Resources From IER:
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