An Emerging Plan to Revive the Oil and Gas Industry" or to "A National Research Priorities Agenda for the Oil and Gas Sector." For those in the energy sector, the documents are fairly blunt in their messages. "The U.S. economy faces significant economic, environmental and strategic risks from the absence of a sustained policy framework to support shale gas and oil development," a section of the E&P document says. It makes a series of policy recommendations including: 1) a long-term road map for energy development; 2) a comprehensive national energy strategy; 3) an aggressive regulatory environment for federal agencies; 4) a stronger national energy commission. "There needs to be a much more formalised set of national policies that can bring coherence to the way that we do business." — Tim McMillan, Former Commissioner of Energy Revenue and Customs And while the E&P industry is making the case for stronger government policy, it is not clear whether Washington is paying any attention. At a House of Representatives energy subcommittee hearing this week, representatives from E&P companies took the political equivalent of the proverbial walk. No one on the Democratic side asked any questions, while on the Republican side, Texas Congressman Michael Burgess called for the end of the federal tax subsidies that make wind energy profitable. "If someone wants to invest in wind, by all means go for it. I would say, however, that it's the federal government's role to subsidize this so-called clean energy and make wind viable." This is part of a familiar refrain that E&P companies have complained about for years. They still do, and the message continues to resonate. Last week, Tim McMillan, a former commissioner of energy revenue and customs, took part in a discussion on a local radio program. McMillan argued that federal agencies need to treat shale as a resource that is subject to federal mineral rights law. The government shouldn't require a local landowner to sign an agreement with an E&P company when no "real rights" are being conveyed, he told Alaska Public Radio. The host countered that the federal government can't force a local landowner to sell mineral rights. But even if it did, McMillan argued that the federal government should be able to tax any energy production on that land. "If someone wants to invest in wind, by all means go for it," McMillan said. "I would say, however, that it's the federal government's role to subsidize this so-called clean energy and make wind viable." In many ways, he is arguing against the federal government's own interests. Wind tax credits alone are worth billions of dollars. According to the U.S. Energy Information Agency, wind energy added $28 billion in cumulative net income in 2014 to the U.S. gross domestic product. The oil and gas industry's efforts to push for stronger policy, however, isn't just a matter of a business that needs government handouts. The industry has significant foreign ownership that makes it particularly vulnerable to global economic changes. "To this day, the United States is the largest energy producer in the world, and we can't afford to fall behind," the E&P industry documents read. It's a message that will be made all the more relevant in the weeks to come as the United States decides whether to expand its production and exports through the Trans-Pacific Partnership, or TPP. U.S. negotiators are seeking to open up global markets for liquefied natural gas (LNG). That's a $13 billion trade opportunity that could have far-reaching impacts on the domestic oil and gas industry. A lot depends on China's commitment to buying U.S. LNG. China is America's largest trading partner, and it accounts for roughly half of the volume of the global LNG trade. And China has been one of the most vocal opponents to the TPP. The TPP could create enormous export opportunities for the American oil and gas industry. But if China decides to turn away from U.S. LNG, as it did with a different U.S. product—shale gas—that could be a huge blow to the American oil and gas industry's efforts to expand production. Tapping into Asia In the wake of the massive shale oil and gas boom that boosted domestic production in Texas and Oklahoma, U.S. exports of crude oil and natural gas started to gain traction in Asia. In particular, Chinese imports of U.S. LNG began to soar in 2013 and 2014, rising from about $500 million in the first half of 2013 to about $5 billion in 2014 and $5.7 billion in 2015. At the same time, shale oil and gas companies have struggled to turn the tide of declining production in the U.S. While the domestic oil and gas industry is still the largest source of U.S. exports, U.S. exports of natural gas have fallen to their lowest level since the early 1970s. Shale oil and gas companies in the U.S. are facing a similar challenge. Oil and gas production continues to decline, and shale companies have struggled to improve on capital discipline. Overcapacity has been a common problem in many global commodity industries, but it's particularly pronounced in the American oil and gas sector. U.S. companies have a huge advantage when it comes to drilling wells, but producing new wells is a different story. To address the problem of overcapacity, shale companies have been reducing their capital spending budgets, in part by using existing wells more efficiently. It's called efficiency unlocking, and it's one of the key reasons why the American oil and gas sector is in the midst of a resurgence. Some industry watchers estimate that efficiency unlocking can increase production by 10 percent or more. But there are still many challenges in American shale oil and gas, particularly for large-scale E&P companies. For example, new wells tend to cost more than traditional wells because they are more complex. It also takes more money and time to get these wells to production. "Liquefied natural gas is a relatively young and complex industry," said Bill Day, director of energy studies at the University of Wyoming. "In many cases, those producers are still learning to apply best practices, and they don't have the same cost structures as, say, an older oil field that has had years to refine and hone their skills." In addition, some of the newest oil fields in the U.S. remain undeveloped, especially in areas with poor infrastructure. The process of drilling new wells takes time and resources, and without a significant surge in drilling activity, it could be a long time before significant amounts of E&P wells are brought online. "If you're going to put up a capital program of $2.5 or $3 billion a year, and it takes two years to bring those wells to production, by the time they are ready to produce and be profitable, the capital is probably gone," Day said. The challenge is twofold. E&P companies need to increase efficiency and reduce costs in order to improve their ability to operate and make profits in an oversupplied market. Second, a substantial and sustained increase in domestic natural gas production is needed to boost exports. And it's that need for exports that could make shale companies so vulnerable to global political pressure. But this is also an opportunity. If the United States can produce more of its natural gas and other energy resources domestically, it will reduce its reliance on imported oil and other energy sources from other countries. It could be an important piece of an overall strategy to reduce U.S. oil imports. But China's resistance to the TPP could throw that all into disarray. Competing with the European Union The United States and China are the world's two largest economies, and one could argue that a strong U.S. economy would also be good for China. For years, the relationship between China and the United States has been a key strategic issue in the Obama administration. Since joining the World Trade Organization in 2001, China has grown into a major trading partner, and it's the largest U.S. goods export market in Asia. That doesn't mean that the relationship has always been smooth sailing. In the 1980s, American presidents saw China as a key part of the "strategic triangle" with the Soviet Union and Japan, which they said were responsible for dividing the world into spheres of influence. In the aftermath of the 2008 financial crisis, Beijing emerged as a major creditor, buying $300 billion of U.S. Treasuries during the period. While that relationship has strengthened over time, the TPP could be a further challenge to China's economic rise. The TPP could reduce the need for China to invest in resources elsewhere. As of now, China has more than 1 million barrels per day of strategic oil reserves, including large deposits of shale oil in the United States, Australia and Brazil. The U.S. imports roughly one-quarter of its oil, much of it from Asia. If China decided to buy less oil from the United States and other countries, it would find itself more reliant on other sources. "The whole TPP thing is all about balancing China's rise and what happens in East Asia," said Richard Haass, a scholar with the Council on Foreign