Author Archives: Larry Edward Penley, Ph.D.

Improve Patent Policy – Promote Energy Innovation

America will continue to depend upon innovation in the energy sector. With prices of oil and gas driven down by new technology, increased supply and availability of renewables, the public’s attention to our energy supply has diminished. But America will continue to depend for its security and prosperity on widely available energy, energy innovation, and the products that come from traditional sources of fuel. That is why changes to patent policy matter for America’s future.

Previously, Penley on Education and Energy has focused on the critical role of advances in energy research (See, e.g., Energy Storage Advances in Research). Now renewed attention should be given to potential patent policy changes that may support those advances. On February 15 2015 Representative Bob Goodlatte (R-Va.) reintroduced the Innovation Act in the House Judiciary Committee. Today, a follow-up hearing will be held on this important patent legislation. While the primary focus of the legislation continues to be on patent trial proceedings, this is an opportunity to make other important changes to American patent law and the patent process.

Among needed changes are means to increase the speed by which patents are processed and approved. Slowness in patent approval processes inhibits advances in the application of research, discourages innovation and limits American competitiveness. Providing additional revenue to the US Patent and Trademark Office (USPTO) is one means to increase the number of patent examiners and encourage the development of needed technology.

Absent increased funding, which would address the problem, there are other potential changes in policy that can be adopted says the Congressional Budget Office (CBO) in a late 2014 report, Federal Policies and Innovation. They include giving the USPTO more flexibility in setting its fees. Fees are considered discretionary spending and are therefore subject to the 2011 spending caps. Congressional action could provide flexibility to the USPTO for setting fees and a Congressional appropriation could permit the USPTO to use the revenue it collects from fees for improving and speeding the patent approval process.

Why are changes necessary?

The answer is simple – to improve the application of innovative research. One example comes from research related to energy storage, important for increased use of energy generated by the sun and wind. Among the research in this area is the work of US scientists and engineers on lithium ion batteries. For example, West Virginia University Professors Hui Zhang, Xingbo Liu and their colleagues published research in 2013 on a means for increasing conductivity and decreasing the energy required for a chemical reaction in lithium ion batteries. A related patent is now before the USPTO where patents often languish due to inadequate resources of the USPTO.

But innovation in battery storage and renewables is not the only source of difficulty for American innovation. Recent patent applications include innovations in drilling, analyzing topographical data, separating chemical components of hydrocarbons, etc. These and related innovations affect availability and uses of traditional fossil fuels.

The Innovation Act is worthy of the public’s attention, and today’s hearing is just one step. Introducing needed changes to the USPTO’s patent processing will improve access to America’s innovation.   The Innovation Act before the House Judiciary Committee offers the opportunity. America will continue to depend for its security and prosperity on energy innovation. That is one very important reason for improving our patent policy.

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The Consumer and US Higher Education

Demonstrating that US Higher Education provides real benefits to society is essential. Society’s considerable support of higher education in federal and state funding merits it. Consumers – parents and students – deserve it in order to make wise choices among colleges and universities. America deserves it for its global competitiveness.

Two reports in the last month provide relevant criticism and direction. The first is from The Economist and the second comes from the Senate Committee on Health, Education, Labor & Pensions. The Economist’s criticism readily acknowledges that the results of a college education are clear.  Those with more education, especially a college degree, receive higher incomes. This relationship of income to college degree does not, however, prove that higher education is responsible. For those of us with long-term experience in higher education, we know the truth. Excellent learning opportunities abound in our best schools. Good advising helps to lead to career-enlarging choices by students. But despite best efforts, a student can coast by with reasonable intelligence and choices of less demanding majors and easier classes. Too many do.

Society is the loser.   When students graduate with little improvement in their knowledge and skills, US capacity to innovate and become more productive is harmed. We hear repeatedly from recruiters that graduates are too often ill-prepared. Re-training by the hiring business is a major, unnecessary expense; it should not be the norm.

While The Economist’s article, Excellence versus Equity, challenges the notion that US higher education is responsible for post-graduation income improvement, the recent work of the Senate Committee on Education offers potential direction. It points to the opportunity to alter the data provided from schools and it points to the need to alter how those data are used as information for parents and prospective students. It does so in its report, Federal Postsecondary Data Transparency and Consumer Information Concepts and Proposals.

Having had ultimate reporting responsibility at two higher educational institutions as president, I was consistently frustrated by the level of institutional resources devoted to federal reporting and discouraged by the inadequacy of the resulting consumer data. That is why as President of Colorado State University (CSU), I instituted the College Portrait to provide consumers with more information about CSU’s outcomes. It was why I sponsored a trial at CSU of the Collegiate Learning Assessment as a potential means to measure the value added for undergraduates by their education. It was also why I sponsored considerable improvements to the student career services as President of the Thunderbird School of Global Management and why I serve on the Advisory Board of AfterCollege, a career path service for college students.

Just graduating is not enough. It is not enough to warrant the investment and expense of college degrees. It is not enough to satisfy students and parents. It is not enough to meet the needs of society, and it is not enough to retain America’s global competitiveness. Change is essential, and that means collecting the right data in order to provide usable information to consumers. The reauthorization of the Higher Education Act is a potentially positive step.

Avoid Sweet Briar for Your College

The news of Sweet Briar’s closing saddens many, including those of us who grew up in the South. This is a region of many historic, liberal arts schools. But sadness does not avoid another Sweet Briar. It does not address the threats that face many schools. There are actions – tough actions – that can be taken to address the threats and avoid becoming the next Sweet Briar or worse.

My recent experience has introduced me to those actions that avoid becoming Sweet Briar – and closing. My Board and I just completed the merger into Arizona State University of the Thunderbird School of Global Management. I was its President. Like Sweet Briar, Thunderbird was a relatively small, private college – but one dedicated to global management education. We are lucky to still have Thunderbird – as a part of ASU. Its students can complete their degrees. New students can enroll in the Thunderbird’s great education, and executives can receive the School’s global management training.

The outcome for Thunderbird was a very good one.  It could have been much worse. Like Sweet Briar, Thunderbird faced increased competition for qualified applicants, changes in what students wanted and employers needed. Like many schools in its situation, Thunderbird was in a vulnerable state. It needed stability, renewal and working capital for its aspirations. Like many schools, its size, traditions and structure limited options.  Luckily its board and I saw a future for the school through partnerships and other alternatives.

There are lessons that can be learned and actions that can be taken:

  1. Be pragmatic about the financial conditions of your college or university. Look at changes over time to your balance sheet and income statement.
  2. If it’s not too late already, begin the “process” of redefining the brand and modifying operations consistent with brand in order to position the school more competitively.
  3. Whether it’s too late or not, implement a communication plan that provides a rationale for the change – in brand or in the search for alternatives.
  4. If it is too late, realistically look for alternatives: joint ventures, mergers, and closure.
  5. Work closely with accreditors to help them understand the school’s situation. Actively solicit their advice and support for alternatives that will be acceptable under regional and specialized accreditation.
  6. Consider consultants like Penley Consulting – and Implement your plan.

The media have made clear that Sweet Briar and Thunderbird are not alone. Both schools took affirmative steps – but with different outcomes. Leadership from presidents and boards will determine what kind of outcome another, similarly vulnerable school receives.

Dear President Obama: End the Ban!

Larry Summers, leader of President Obama’s National Economic Council from 2009 to 2010 and former Harvard University President, made a forceful case last week at the Brookings Institution to end the 39-year-old crude oil exports ban.  The ban, which was put in place in 1975 in response to the Arab oil embargo, reflects policy stuck in the 1970s. We have an opportunity to promote U.S. economic development through a booming energy renaissance that demands a very different policy some 40 years later.  Permitting U.S. oil exports will lower gasoline prices at the pump, provide Americans with new jobs, lower unemployment, and strengthen the nation’s flexibility in international policy.  Mr. Summers believes President Obama should act now.  His case is straightforward: “We should not have prohibitions without a reason.  We need all the economic benefits we can get.”

Mr. Summers spoke at the release of a new report by the Energy Security Initiative (ESI) at Brookings, entitled “Changing Markets: Economic Opportunities from Lifting the U.S. Ban on Crude Oil Exports.”  The study supports his argument for exports.  U.S. refineries cannot handle the dramatic increase in domestic crude oil production that has resulted from the domestic shale boom.  Mr. Summers also makes clear that his support for ending the export ban is not an argument against climate change or the need to address it.  The US is already making surprising progress in limiting carbon, he observes.  Retaining a ban on exports is not the solution to additional changes that may be considered in well construction and wastewater disposal, associated with hydraulic fracturing.  Ending the ban on oil exports will drive economic growth with new jobs and increased disposable personal income that comes from savings at the pump.  Improved efficiencies in the refining process are also likely.

According to the macroeconomic study conducted by the ESI and the National Economic Research Associates (NERA), eliminating a ban on crude oil exports could inject between $600 billion and $1.8 trillion into the domestic economy and reduce gasoline prices by 9 cents per gallon by 2015.  The study coincides with a study by IHS released earlier this year that also forecasts lower gasoline prices and increased employment and economic revenue.  Because oil production is now at its highest point since 1987 as a result of the steep rise in domestic horizontal drilling and hydraulic fracturing, suppliers are looking for ways to bring their product to market.

Without increased market access via international exports, the study warns that U.S. production will decline. Crude stockpiles climbed to a record high on the U.S. Gulf Coast earlier this year, a trend that will continue so long as the industry believes that the export ban might be lifted.  With broader market access, however, oil production in the Gulf Coast alone could increase by over 1.5 million barrels per day.  Brookings gets it right: “We think the key lesson of our economic history in the energy space is that the U.S. economy works better by embracing market forces than trying to resist them.”

Mr. Summers’ succinct comments are the latest example in a growing trend of influential American leaders who wish to revisit the ban.  Obama Administration officials—including Energy Secretary Ernest Moniz—have asked to reexamine the ban’s utility.  Several high-profile lawmakers, for example Sens. Mary Landrieu (D-La.), Lisa Murkowski (R-Alaska), and Rep. Joe Barton (R-Texas), have followed suit.  According to an Associated Press poll conducted this year, ninety percent of economists surveyed believed allowing crude oil exports would improve the economy.

Additionally, the comments by Summers and the release of the Brooking’s report come on the heels of the Commerce Department’s decision earlier this summer to allow the export of lightly processed condensate, a first step that further bolsters Summers’s argument. Brookings believes President Obama has the authority to remove the ban without consulting Congress, meaning he could capitalize on the increasing momentum without getting weighed down in a political battle in Congress.

The President has the clear authority to act. The American people stand to gain substantially from ending the ban. The U. S. stands to gain additional international foreign policy leverage in a world where oil and natural gas exports provide power to some and constrain others in the continued European and Russian dance over the Ukraine.  Lawmakers and policy wonks are loudly supporting a rational crude oil export policy.  It is now time for President Obama to capitalize on this momentum and end the ban on crude oil exports.

http://www.insidesources.com/dear-president-obama-end-the-ban/ 

 

 

Bipartisan Charter School Support

Education policy has initiated some bipartisanship on Capitol Hill.  This week, the U.S. Senate followed up on the action of the House’s massive vote of 360-45 on charter school education. The House’s bill, The Success and Opportunity through Quality Charter Schools Act, H.R. 10, passed right before this week’s recess and now its companion bill in the Senate introduced by Senators Mark Kirk (R-IL), Mary Landrieu (D-LA), Lamar Alexander (R-TN), and Michael Bennett (D-CO) Expanding Opportunity Through Quality Charter Schools Actis gaining traction.  The purpose of the bill is to reauthorize the federal Charter Schools program.  Ultimately, encouraging more educational options for America’s school children and their parents, which benefits expand to the broader economy.

 

H.R. 10 consolidated two federal charter school programs and allocated $300M in funding that encouraged states to expand charter schools.  The Senate bill differs only slightly in that it prioritizes grants to states that have policies to help charter schools acquire or lease facilities, contains no cap on funding, and allocates a higher percentage of funding to the highest-performing networks for their expansion.

 

From the earliest discussions of charter schools, a primary reason for my support has been encouraging innovation and providing lower income and minority school age children the same options that are available already to majority white and wealthier families.  The unfortunate reality is Black and Hispanic children still trail their White classmates by substantial margins in their performance, and still underperform White children in reach proficiency in subjects such as mathematics.

 

In the most recent 2013 National Assessment of Educational Progress (NAEP) scores for fourth grade mathematics proficiency, only 18% of Black fourth-graders and 26% of Hispanic fourth-graders had scored at the proficient level, whereas 54% of White students scored proficient.  By eighth grade, all three groups had fallen further behind, with Black school children trailing their White counterparts by 31 percentage points (14% versus 45%) and Hispanics’ trailing by 24 percentage points (21% proficient versus 45%).  Similar results were evident in fourth and eighth grade reading proficiency.

 

Penley on Education and Energy has previously reported the substantial difference in scores for minority children in reading and mathematics proficiency.  These differences matter to all of us – not just the parents and children who are non-White.  As the demographics of this country continue to shift away from a white majority to a White minority, our economic prosperity will depend on Hispanic and Black professionals and Hispanic and Black workers in all types of jobs.  Their capacity to perform the needed skills for employment and for access to higher education will determine the country’s future.

 

Charter schools represent a means for access to choice in education.  This is the same choice that many White and wealthier families of all ethnic origins now have – the ability to pay extra for parochial or private schools of choice.  All parents deserve that same option.  In the late nineties, I supported  choice in education long before it was popular, when I chaired an education task force.  It mattered then before we understood fully the dramatic changes in U.S. demography.  It matters far more now as we more precisely understand the face of this country in this Century along with the very substantial improvement in economic competitiveness of emerging and developing economies.

 

Thankfully, a bipartisan effort is underway to encourage further development of needed charter schools. Let’s hope that we can continue to find solutions to improve our economic and competitive future by focusing on education opportunities for all.

Tax Reform – A Possibility?

Recently I commented in Roll Call on budget politics, energy and the value of moving ahead with fundamental growth driving tax reform.  Chairman of the House Ways and Means Committee, Dave Camp (R-MI) had recently introduced a tax reform package that can make a real difference in growth, including the already dynamic but threatened energy industry in the U.S.

 

Many have called Chairman Camp’s package from the House a tremendous long shot in light of extreme congressional partisanship, the control of the two houses by different parties, and Chairman Camp’s impending retirement from the House.  But perhaps tax reform is not such a long shot after all.  And the reason is Senator Ron Wyden (D-OR), who now chairs the Senate’s Finance Committee.  He has made tax reform a priority as well.

 

Mr. Wyden has stated in his blog, “The U.S. tax code is clearly in need of reform.”  Calling the current tax code a “rotting carcass that smells worse every year,” he has supported a flat corporate tax rate.  He has also supported simplification of the tax code, and he has linked tax reform to job growth.  Continuing his comments about the need for reform in his blog, he added, “We need comprehensive tax reform that simplifies the corporate and the individual code at the same time so that no U.S. business or taxpayer is left out.”

 

Chairman Wyden has frequently commented on the energy-related aspects of the US tax code.  More often than not, he has supported tax incentives for renewables from the perspective of parity between traditional sources of energy and renewable sources.  Among the energy tax issues he has addressed are master limited partnerships (MLP), which have encouraged development and job growth for traditional energy companies.  And traditional energy companies have delivered for the benefit of the US economy, having created 148,000 jobs in 2011, 37,000 of which were direct jobs within the industry.

 

In discussing his approach to energy-related tax reform, Chairman Wyden said tax reform could present two options for the industry when it comes to MLPs. Congress could pare them back for existing recipients as Chairman Camp proposed in his recently drafted tax reform package, thereby raising revenue with a commensurate reduction in the top-line corporate tax rate.  Alternatively tax reform could extend to all sectors, as would happen under the “MLP Parity Act” sponsored by, among others, Senators Chris Coons (D-DE) and Jerry Moran (R-KS), along with House Representatives Ted Poe (R-TX) and Mike Thompson (D-CA).

 

The choices open for tax reform are many.  But consideration has to be given to how the US assures its continued progress toward energy independence, which formerly was considered a dream.  As Penley on Education and Energyreported almost two years ago, there is increasing available evidence that US energy independence has finally become a realistic possibility.  And whether energy independence is a reality or not, the value of the US energy industry is enormous for US economic growth and improvements in US balance of payments.

 

Like Chairman Camp and Chairman Wyden recognizes that delivering on tax reform while driving growth will not be easy.  But the combination of a reforming Democrat from the Senate and reforming Republicans in the House of Representatives may make tax reform a real possibility.  Both retiring Representative Camp and Senator Wyden recognize the benefits of growth and the limitations on growth represented by our current tax code.

 

For the sake of the energy industry and widespread opportunity for growth from all sectors of our economy, tax reform may not be so out of reach after all.

Coal & Its Future Through Technology

Energy demand is growing globally, and growth is likely to continue.  The International Energy Agency (IEA) projections are for a continuing dominant role for fossil fuels in the next decade.  These projections for fossil fuels come despite projections for commensurate growth of renewable sources of energy.  Coal remains one of those very important fossil fuels for which growth is projected, and its increasing use is evident especially in emerging markets where it is relatively cheap and plentiful.

 

While we in the US are seeing a shift away from coal in US power plants to cleaner (fewer greenhouse gas emissions) fuels such as natural gas, this is not the case in developing countries.  In much of the developing world, especially in emerging markets, coal is and will increasingly be a major source of energy that is critical to those markets’ development.  That growth outside Europe, Japan and North America represents a major global issue for many.  But it need not represent the problem imagined by some if policy supports the needed research on clean coal.

 

Technology can change the future of coal – both at home and globally.  Technological innovation can mean that coal continues to become a much cleaner fossil fuel with the emission of fewer particulates and greenhouse gases.  For example, clean technologies have the capacity to increase the efficiency of coal’s use in power generation and to alter favorably the impact of coal on the environment.  Among those technological advances has been the gasification of coal along with co-gasification of coal and biomass.  Gasification, (see the Department of Energy) is a controlled process that uses heat and pressure to set in motion chemical reactions that produce “syngas,” which is primarily hydrogen and carbon monoxide.  Rather than a process of burning the coal to produce the gas, gasification is a process that partially oxidizes the coal to produce the syngas.

 

Recent additional research in this area by two scientists, Natalia Howaniec and Adam Smolinski, is representative of the potential from policy that supports research and the technological innovation that can come from it.  Ms. Howaniec and Mr. Smolinski used a laboratory fixed-bed reactor with steam for co-gasification of coal and biomass.  Their conclusion was that the laboratory process offers several advantages, including the chemical synergies associated with using biomass in conjunction with coal.  Those advantages include the stability of the fuel supplies, the scalability of the process, and emission reduction.

 

This stream of research is especially important in light of the anticipated, continued growth in use of coal globally and coal’s potential to address substantial energy needs of emerging markets.  As coal transitions to a cleaner source of energy, it is important that we examine new regulatory requirements imposed on coal fired power plants in terms of their consistency with continued research into the next generation of clean coal technologies.  The EPA’s recent new source performance standard (NSPS) for new units effectively required carbon capture and storage (CCS) technology in order for plants to achieve emissions standards of no more than 1,100 lbs. of CO2 emitted per megawatt-hour of electricity produced.  There are many critics who argue that this technology is currently in a developmental stage and is not broadly commercially available.  Until it is more widely adopted and improved upon, its costs will remain too high for commercial viability.

 

 

What is needed at the policy level is a willingness to put further, additional resources behind research associated with clean coal.  With that kind of research, it is reasonable to believe that commercially viable clean coal will become available.  Because of the abundance of coal and the development of emerging economies, coal will remain a widely used fossil fuel and major source of energy for the next decade.  Carefully drawn policy in support of clean coal will determine coal’s impact over that decade.

 

Raising School Accountability

In an earlier posting on Penley on Education and Energy– The Common Core and Business – I pointed out the need for our business leaders to use language that can be understand readily about the need for K-12 change.  It’s about raising school accountability – not insisting that teachers do the same thing with common standards around the country.  Yes it is common core, but it is common core at the local level with real teachers teaching.  It also matters for business leaders to see and be able to discuss what common core really means at the classroom level. Recently, I saw the value in educating business leaders on the impact of Arizona’s College and Career Readiness Standards.

The Rodel Foundation of Arizona held one of its most important public events: All A’s for Arizona.  Among the speakers that evening was John Huppenthal, State Superintendent of Public Instruction.  But I am sure that Mr. Huppentahal would agree that the most important speakers were five K-12 teachers: Stacey Hicks and Jorge Ontiveros (Paradise Valley Unified District), Tiffany Thompson (Mesa Public Schools), Veronica Villegas (Flagstaff Unified District), and Amanda McAdams (Glendale Union High School District).

Those five teachers did something that I wish the larger public could experience.  They demonstrated how a teacher used Arizona’s College and Career Readiness Standards (Arizona’s version of common core) to teach.  They taught various lessons using the Standards, and they engaged their business and education audience as the students.

Here is what we – the audience – learned.  Arizona’s standards are very challenging for students – or adults who have been out of school for a while.  Arizona’s standards build on one another across the K-12 grades, leading to improved college and career readiness.  Arizona’s standards demand that students read and understand difficult material – more difficult than I encountered in the public schools of Kingsport TN decades ago.  Arizona’s third grade math standards and the approach taken facilitate considerably learning fractions, knowledge essential but difficult for many 8-9 year olds.  And they emphasize that a student must think critically with multiple perspectives employed in analyzing a problem.

Raising accountability of our schools is essential.  Doing so with even more challenging material – and standards – that demands critical reasoning and analysis will serve students well.  It was just more than a month ago that I wrote in Penley on Education and Energy about the Economist’s vision of the future impact of technology.  That future will challenge traditionally educated citizens.  But Arizona’s Standards demand from K-12 students the kind of analytical and reasoning skills essential for that future.

It is time to move on – and adopt standards that will raise the college and career readiness of US students.  Without change, we are destined to continue to lag other countries, imperiling our long term economic prosperity and global competitiveness.

Technology, The Economy and The Education We Need

That technology is once again altering the economy and world of work is evident. The Economist has written a timely, relevant analysis in its article, “The Onrushing Wave” that further examines this intersection.   The technological transformation has implications for education – in what individuals can do to prosper and what kind of education society needs.  Technology-generated changes to the economy are already capturing the public’s attention, and the primary expression of this attention is concern with growing income equality and lower-than-desired mobility.  Right now discussion appears to make the primary remedies seem political.

Responses to the technological change must be more precisely directed if we are to address the impact of the change.  It is education that will make the difference in which individuals prosper in the transformation.  How educational systems and institutions respond to the transformation will determine whether society’s needs are met.

Once again we face an apparent repetition of the economic disruption that came in the 18th and 19th centuries.  Disruption led to the disappearance of some jobs and the creation of others.  But consumers benefitted substantially.  The Economist concluded,

Everyone should be able to benefit from productivity gains—in that, Keynes was united with his successors. His worry about technological unemployment was mainly a worry about a “temporary phase of maladjustment” as society and the economy adjusted to ever greater levels of productivity. So it could well prove. However, society may find itself sorely tested if, as seems possible, growth and innovation deliver handsome gains to the skilled, while the rest cling to dwindling employment opportunities at stagnant wages.

Which skills will matter and what kind of education is needed?  The economic challenges that come from the on-going disruption point to the value of education – but not to any traditional skills. Rather than traditional skills, the disruption points to the need for adaptability.  What will matter for individuals are the analytical skills associated with dealing with complexity and developing adaptive responses. Education will serve society’s needs if it is focused on the creation of a learning environment that develops critical thinking and entrepreneurial adaptability.

At the K-12 level, this is why implementation of the new common core in the U.S. is so serious.  Critical thinking skills are at the heart of the common core; see the work of Achieve in this area.  At higher education levels, alterations in pedagogy are essential as well.  Digital technology provides for, after capital costs, a cost-effective substitute for lectures.  Coupled with more intensive use of application-driven learning – via digital and in-person media – higher education can support similar needed skill development.  While we will not escape the transformation described in the analysis by The Economist, we can educate to that transformation rather than attempt to forestall it or politically manipulate its impact.

The Challenge of Energy in 2014

The abundant availability of energy in 2014 is encouraging – in very many ways.  New technology associated with accessing and extracting natural gas and oil has created an energy boom along with new jobs.  The Economist likened the boom in energy to the California gold rush.  But this boom is very different in its technology and the very particular political challenges it faces – for both traditional fossil fuels and renewable energy.

Beyond creating new jobs and new sources of energy, the “boom” has leveled prices of natural gas and oil.  It has also moved the United States closer to what multiple presidents have called for in historic, campaign political statements – energy independence and energy self-sufficiency for America.  For consumers, access to widespread, available oil and natural gas means price stability, including months of decline during 2013 in the price of gasoline at American gas stations.

Of course, there is no guarantee that international issues will not alter current supplies and threaten recent price stability.  Both supplies and price are particularly vulnerable to the continued instability in the Middle East and the uncertainty over persistent, volatile political issues on the Korean peninsula and old territorial disputes between China and Japan.  Historic trends in prices have frequently been disrupted by political volatility.

Despite the very good news for consumers and the U.S., reactions to the boom in energy availability have not been uniformly positive.  Concern over the environment and the desire to avoid “energy production in my backyard” have led to voter restrictions on hydraulic fracturing or “fracking” – the extraction of natural gas from shale beds using the injection of water and chemicals.  The public’s negative reaction is not restricted to gas wells; indeed, consumers have also reacted unenthusiastically to the presence of windmills that produce renewable energy and sometimes kill errant fowl.  That same environmental concern has led to pressure on government to control energy production with new rules.  Misplaced beliefs about the ability to restrict global markets has also led to pressure on the federal government to limit exports as well via licenses for ports associated with liquid natural gas.

In so many ways, the public has benefitted from the ingenuity that has come from the marketplace.  That benefit has come in the form of stability in energy prices, new jobs in the fossil and renewable sectors of the industry, and increased availability of energy, globally and at home.  The last decade has not only seen a boom in the oil industry with newly identified sources of oil and natural gas, but it has seen improved technology in the renewable energy sector as well.  In addition to improvements in the technology associated with the generation of electricity via wind, progress has continued with greater efficiency of solar cells too.

Yet, the challenge to energy availability in 2014 is likely to continue.  For those who support renewable energy and for those involved in traditional fossil fuels, there is a common interest.  It is in limiting government restrictions on energy production and supporting R&D.