But realizing this vision requires that policymakers successfully tackle a number of complex issues. Here are what I believe are the most important:Resource access & development policy: The U.S. is resource-rich when it comes to energy forms, so the issue here is how much do we make available for development, at what price, over what period and under what type of regulatory regime? Outside of the central and western Gulf of Mexico, much of America’s offshore oil and gas resources are presently off limits, although there are plans being worked on to develop offshore wind energy systems. Federal lands require (by statute) a number of alternative use and conservation/preservation considerations and we are now only beginning to consider scalable Arctic development, including lands in Alaska. Environmental policy to preserve and protect lands, species, water, air and safety requirement for developers are also critical considerations. Prudently weighing trade offs are key challenges for policymakers.
Onshore, in the lower 48 states, issues surrounding well integrity, hydraulic fracturing, water use, treatment, recycling and disposal of waste water, community impacts, emissions and other environmental and safety concerns are currently the focus of both state and federal regulators and will need to be resolved collaboratively with producer/operators and other stakeholders to allow the large scale development of our enormous unconventional resources.Infrastructure build out: This is a key consideration for realizing the benefits of the current boom in unconventional oil and gas development. Crude oil needs to get to refiners and natural gas to utilities, industrial customers, processors and other end users. That requires pipeline interconnects and new midstream infrastructure and involves permits, environmental assessments and managing “above ground” impacts of local communities through which pipes and railways travel. As investments here are bound to be enormous, regulatory certainty and confidence in a timely and predictable permitting process (while allowing for public input) are critical as lead times are significant and failure to construct key infrastructure leads to bottlenecks and stranded resources.
Fuel choices and the use of mandates and incentives: Power generation, industrial uses, feedstocks, transport and heating/cooling account for the bulk of domestic energy usage. With ample new supplies of fossil fuels on the horizon, policymakers will be confronted with the choice of how and whether to employ federal tools (e.g., subsidies, mandates, incentives, etc.) to stimulate fuel diversification choices and support nascent industries, an especially tricky proposition in an era of reduced federal budgets, but one which needs to be discussed in the context of near and longer term diversification and cleaner future fuels and transport options. The role of nuclear energy going forward is an obvious issue here as the high cost of entry and competition from low cost gas in a low demand growth future makes such new investments infeasible strictly on economic grounds. The future of coal, ethanol (the “blend wall” discussion is coming) and renewables also require some hard choices. And the issue of incentives and subsidies requires an examination of current tax rates and other preferences and special provisions.