The American Petroleum Institute funded a study that concluded proposed EPA rules on emissions would lower domestic hydraulic fracturing for natural gas more than 50 percent, cut natural gas production overall 11 percent and reduce oil production as much as 37 percent.
"EPA needs to fix these rules in a way that they'll reduce emissions but not impede oil and natural gas development, which creates jobs and government revenue and improves our energy security," Howard Feldman, API director of scientific and regulatory affairs, said in a statement.
The EPA's proposed rules are designed to reduce emissions of volatile organic compounds from drilling and production of oil and natural gas.
API claims the proposal would mean the federal government is out an estimated $10.8 billion in taxes and royalties from drilling and production.
Last week, the energy trade group announced it was suing the EPA for what it claimed were "unachievable requirements" for use of cellulosic biofuels in 2012 fuel standards.