All In on Energy Policy

Why we need a "most-of-the-above" energy policy, and how American can update the way we think about oil.

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Instead of fretting about a scarcity of energy, the United States is now grappling with how to manage a vast abundance of energy resources, thanks to the discovery of large deposits of natural gas and crude oil. In "The Power Surge: Energy, Opportunity, and the Battle for America's Future," senior fellow for energy and the environment at the Council on Foreign Relations Michael Levi argues that weaning the nation off of foreign oil is far less consequential today than 40 years ago. Levi recently spoke with U.S. News about a "most-of-the-above" energy strategy, the government's role and the consequences of America's newfound energy boom. Excerpts:

What is your vision for U.S. energy policy?

We need a "most-of-the-above" strategy that expands opportunity on all fronts but weeds out bad investments from our portfolio, whether those are ones that make us overly dependent on oil or pollute the environment in ways we find unacceptable. The key to making progress on energy without getting buried in endless fights is to focus on energy itself, rather than using it as a proxy for much bigger and far more intractable ideological fights.

What place do renewables have in America's energy future?

People are right to be concerned that we use too much oil, but you don't use less oil by producing less of it. You use less oil by having and using cars and trucks that are more fuel-efficient and by changing urban planning patterns and public transit. If you think that natural gas is a long-term problem for climate change, you don't solve that by not using natural gas because the alternative will be coal, which produces even more emissions. You solve that by pushing for zero-carbon energy sources, whether that's renewable energy or nuclear power or something else.

[See a collection of political cartoons on energy policy.]

Can the tension between renewable energy and fossil fuels be overcome?

There are fundamental tensions between a zero-carbon energy path and ever-growing production of fossil fuels. But if people focused more on getting wins for the things they care about instead of maximizing the number of losses for their traditional adversaries, we might be able to make more progress.

What role does government regulation play in the future of energy development?

Government is always involved in energy, and the question is – will it be in a smart way or a stupid way? There's one school that seems to have never seen a government initiative it didn't like, and there's another that instinctively turns to the market to solve every problem. The reality is there are some [effective] government initiatives, like smart regulation of shale gas development or putting a price on carbon emissions to reduce our contribution to global warming. There are others like massive spending sent to individual companies used to develop new technologies that, executed the wrong way, are bad news.

What's the future of shale development?

You could see hundreds of thousands of additional jobs and as much as another percentage point added to our economic growth. Globally, people are looking to see whether U.S. natural gas exports will change the geopolitics of energy and of relations between countries. I think that's probably overstated, but there will be some impact, particularly as Europe and Russia continue to fight over natural gas. But, for all of those things to happen, we need to sort out the last big challenge, which is on the ground where natural gas development is happening. Whether it is traditional environmental challenges like clean air and water or the community challenges associated with integrating intensive industrial development into areas that aren't accustomed to it, if we don't tackle those issues effectively, all of those other benefits would be [lost].

[Read the U.S. News Debate: Is Fracking a Good Idea?]

What will be the nation's relationship with energy producers and consumers abroad?

We have to think about oil and natural gas separately. We're having a debate over whether to allow natural gas exports. I doubt that natural gas exports themselves would revolutionize geopolitics or global markets, but a decision to not allow them would cause problems with our existing [and future] trade relationships.