The abundance and low cost of unconventional gas and oil resources provide a once-in-a-generation opportunity to change the nation’s economic and energy prospects, and a recent paper recommends a specific action plan to maximize the potential.

A joint project of the Harvard Business School and the Boston Consulting Group is recommending what it calls a win-win strategy. According to the project’s findings, “The U.S. now has a global energy advantage, with wholesale natural gas prices averaging about one-third of those in most other industrial countries, and industrial electricity prices 30–50% lower than in other major export nations. That means major benefits for industry, households, governments and communities, while reducing America’s trade deficit and geopolitical risks.”

In summary, the strategy makes the following broad suggestions:

  • Capitalize on America’s new energy advantage, boosted by shale production, to enhance U.S. competitiveness and the prosperity of the average citizen;
  • Minimize the local environmental health and community impacts of developing new energy resources at competitive cost; and
  • Utilize unconventionals to accelerate a practical and cost-efficient transition to a lower-carbon, cleaner-energy future.

More specifically, the report offers an 11-point plan to address issues of the future:

❶ Continue timely development of energy infrastructure: To move unconventional gas and oil across the country, additional pipelines, gathering, and processing infrastructure are needed.

❷ Develop a skilled workforce: Many more trained workers with the appropriate skills are needed to fill good-paying jobs.

❸ Eliminate outdated restrictions on gas and oil exports: Restrictions on exports created in response to the 1970s’ energy crises are no longer needed. Exports would boost U.S. economic and job growth and would benefit friendly nations.

❹ Develop transparent and consistent environmental performance data: This would create a foundation for monitoring compliance and stimulating innovation. State governments, industry and NGOs would all have roles to play.

❺ Set robust regulatory standards: Better guidelines are needed to speed adoption of industry-leading practices and to encourage innovation.

❻ Achieve universal regulatory compliance: Industry and regulators need to strengthen regulatory enforcement and producer compliance.

❼ Strengthen best-practice sharing: Speed up the dissemination of best practices in operator performance, regulations and enforcement through more proactive stakeholder outreach.

❽ Work to contain methane leakage: Uncontrolled leakage can offset the climate benefits of natural gas. Cost-effective methods to contain leakage are available and need to be deployed throughout the natural gas value chain.

❾ Set policies that encourage cost-effective emissions reductions: Climate regulations and policies should be market-based to encourage cost-effective carbon reductions.

❿ Move toward clean-energy technologies: The U.S. needs to encourage ongoing private- and public-sector research investments in cost-effective, low-carbon energy technologies and applications. This includes broader uses of unconventional natural gas.

⓫ Build a smart, efficient energy grid: The long-term transition to a low-carbon energy system will require a power-grid that can embrace renewable power sources. The U.S. must invest now in these grid improvements to enable renewables to scale over the long run.

“To move these steps to action, we need to change the discussion, move beyond ideology and break the gridlock,” the authors of the recommendations said. “Industry, NGOs, governments and academics must transcend their traditional positions, let go of the exaggerated rhetoric, and start overcoming historic skepticism and distrust that have led to the current, zero-sum mindsets and halting progress.

“The U.S. needs to achieve a rational middle ground to capitalize on this historic opportunity. The stakes are too high to fail. Long-entrenched opposition and antagonism will not dissipate overnight. But we must get started.”

Contact the author, Mike Madere, at mmadere@hartenergy.com.