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Energy policy shifting as abundance replaces scarcity: Obama adviser

A fracking operation is seen outside Williston, North Dakota, October 19, 2012. REUTERS/Jim Urquhart
A fracking operation is seen outside Williston, North Dakota, October 19, 2012. REUTERS/Jim Urquhart

By Roberta Rampton

WASHINGTON (Reuters) - As U.S. oil and natural gas production booms, the Obama administration's energy policy has been "fluid" by necessity to adapt to the huge economic opportunities and climate challenges posed by growth, the top White House energy and climate adviser said on Wednesday.

In a speech to a room packed with energy analysts and lobbyists, Obama adviser Heather Zichal acknowledged that U.S. energy policy "might not look perfectly pretty from the outside" as it evolves to shifting supply-and-demand scenarios.

"It is a little bit fluid, but the landscape is changing," Zichal said at the Center for Strategic and International Studies, a Washington think-tank.

The White House wants to ensure oil and gas production is done as safety as possible, while investing in research and development of renewable forms of energy and addressing climate change, she said.

"I think that those goals will really help this administration deliver on an energy policy that makes a lot of sense," Zichal said.

"Energy is the common thread that links these three issues: our economy, our security and our climate," she said.

SHALE REVOLUTION

Hydraulic fracturing, or "fracking," has blasted massive new supplies of oil and natural gas from shale rock deep beneath the earth. After decades of policies built around being dependent on imports of foreign oil, lawmakers and the administration are grappling with whether and how to allow more exports.

The United States could surpass Saudi Arabia as the world's top oil producer by 2017, and within years could become a net exporter of natural gas.

Zichal noted the administration is finalizing new rules for disclosing chemicals used in fracking on public lands, and tougher standards for fracking wells and wastewater.

"We're not glossing over the challenges of natural gas development, but we're also not ignoring the opportunity natural gas presents for jobs and for the climate," she said.

The White House recognizes the impact oil and natural gas production has had on the economy, creating jobs and bringing manufacturing operations from companies like Dow Chemical Co and Ford Motor Co back from overseas, Zichal said.

She did not shed new light on how the administration will rule on permitting exports to more countries, decisions expected sometime this year. Zichal repeated that the White House is "not opposed to the notion of exports" but wants to ensure they don't "undermine" American consumers.

Zichal said she is spending "a lot of time talking to the rail industry" about infrastructure needs to move a glut of oil from the U.S. Midwest to refineries on the coast, another outcome of the sudden bounty of oil supplies.

But she shied away from discussing White House thinking on the Keystone XL pipeline, a project designed to ship oil from Canada and North Dakota to Gulf refineries.

Zichal said the decision-making process is in the hands of the State Department. The project has been stalled for years pending a decision by the administration.

(Reporting by Roberta Rampton; Editing by Lisa Shumaker)

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