When you ask energy experts what headlines to watch for in President Obama’s second term, you’re likely to hear about issues that are hot right now: the possibility of new greenhouse gas regulations, growth of U.S. oil and gas, prospects for wind energy and distributed solar, LNG exports, and the like. All of these will almost certainly be in the news. But I’ll hazard another guess: odds are high that many of the biggest headlines and decisions will be about things that we aren’t even thinking about today.
Look at the President’s first term. Some of the headlines were about predictable issues: the fate of cap-and-trade legislation; the outcome of the Copenhagen climate talks; the results of U.S. efforts to promote clean energy through the stimulus. One can also argue that while the specifics of other big climate headlines – Hurricane Sandy, Western wildfires, and so on – were unpredictable, the fact that there would be climate events like like that were not. But many of the biggest energy events and challenges of the last four years were pretty much unanticipated: the Deepwater Horizon oil spill; the U.S. oil and gas boom; the Keystone XL pipeline and LNG export fights; the Fukushima nuclear disaster; and the Arab Spring, with all of its implications for world oil markets.
Look back through Dan Yergin’s timeline of (mostly) modern energy history and you’ll see that this isn’t a quirk of the last four years. The Bush administration didn’t expect $145 oil, Hurricane Katrina, skyrocketing natural gas prices, 9/11, or a protracted war in Iraq. The Clinton administration, entering office soon after the first Iraq war, probably did not expect eight years of energy market calm. Heck, the Buchanan administration was probably pretty surprised when Edwin Drake struck Pennsylvania oil.
The unpredictability of the energy world shouldn’t just matter do crystal ball gazers. It should matter to businesspeople whose investments are exposed to the possibility of rapid and unexpected change. It should matter to government leaders who are evaluating policy options whose costs and benefits might change suddenly in the face of unanticipated events. And it should matter to anyone, analyst or advocate, who tries to influence them: there is a tendency to focus on tactical decisions, but when circumstances change, it’s leaders’ much broader strategic outlooks that shape how they respond.