America is in the midst of a tremendous energy surge. Smart drilling technologies are supplying cheap and abundant natural gas that is saving families money on their energy bill and will likely drive the United States to be the world’s top oil producer by 2015.

Developing our natural resources is creating jobs and growing the economic pie — not just in our energy-rich states but across the country. But we would be doing even better if the federal government wasn’t holding us back.

We need policymakers to allow the energy market to operate more freely. The right reforms would promote competition and innovation, avert wasted taxpayer dollars and effectively protect the environment. Those reforms center on three principles: opening access, removing taxpayer-funded subsidies, and rolling back regulations that come at great cost but provide little, if any, meaningful environmental benefit.

Production of oil and natural gas in the United States is booming, but that boom is largely occurring on state and private-owned lands. Large swaths of federal lands, and waters with abundant resources, are locked up by the government. We should open up leasing, exploration and production in more areas off America’s coasts, as well more federal lands.

No, this doesn’t mean drilling in the Grand Canyon. There are plenty of other energy-rich options out West where the feds own the majority of the land.

Opening access isn’t just about unleashing the resources we own; it’s about increasing access to international markets. The United States is in a position to become an exporter of liquefied natural gas. Exporting natural gas would provide a tremendous benefit for the American economy.

Energy should be treated like any other good we trade freely. We need to lift the artificial restrictions that prevent the United States from capturing that benefit. Another reform that will bolster America’s energy development: remove taxpayer-funded handouts that prop up companies or cushion their bottom lines.

The reality is, the demand for energy isn’t going anywhere any time soon. The energy sources that can heat our homes or get our cars to work in an affordable, reliable way will stand to benefit tremendously. They won’t need any help from the taxpayer.

In fact, while subsidies may benefit certain companies in the near-term, they can cripple the long-term growth of an industry by creating a dependency on the government and directing focus away from innovating and lowering costs.

And we need to slow the government’s role when it comes to the massive regulatory toll the Environmental Protection Agency and other agencies are inflicting on the coal industry. We have over 500 years’ worth of coal at current consumption rates, but new regulations will prevent us from building new plants and force companies to prematurely decommission the ones we have — all for an unnoticeable environmental impact.

No one knows for sure what the energy future may hold, but the past few years have provided a valuable lesson. When the government pulls the strings to pick winners and losers, we see taxpayer dollars wasted, higher energy prices and jobs lost. But when we witness the power of the entrepreneurial spirit and the free market, we see why we’re in the midst of a transformative time for America’s energy sector.

 - Nicolas Loris is a policy analyst at The Heritage Foundation, a Washington think tank.