Economists tend to be very good at finding reasons things won’t go well, and it is part of their professional mission to detail and warn the many potential pitfalls for companies, governments and individuals facing a complex and uncertain world. So how does the profession of energy economics in North America deal with an unexpected outbreak of good news?

Rising production of oil and natural gas based on falling prices has made many of the anticipated problems with transitioning to a cleaner economy less immediately urgent, and despite the recent problems with the transmission grid and generation system exposed by Hurricane Sandy in the Northeast, the US has in large part navigated a period of low demand for electricity without a sharp slowdown in needed investment.

Gathered at the US Association for Energy Economics North America conference in Austin, Texas this week, attendees and presenters were quick to warn that each silver lining carries with it a cloud, and that the risks for the North American energy sector – from geopolitics to infrastructure – remain intact. Some speakers and attendees warned against what they saw as an emerging trend to ignore risks because of forecasts of improved American energy security, with former Ambassador to Israel Edward Djerejian telling Breaking Energy that continued efforts toward a solution in the Middle East remain a vital task for what is now known to be an upcoming second Obama term. “Energy independence is an oxymoron; these are global commodities,” Djerejian said.

Breaking Energy has extended coverage of the 2012 USAEE conference. See here for many more stories and for video.

Infrastructure issues also remain pressing, as a mismatch between rising crude oil and natural gas production in the US and the country’s established transportation and delivery systems threatens to worsen. The US is producing more light, sweet crude oil but has a top-notch system for processing heavier crude, and foreign countries with refinery systems able to handle that product have the heavier crude oil that the US refineries need, current Energy Information Administration chief Adam Sieminski told the conference.

Environmental regulations that wended their way through the Obama administration’s Environmental Protection Agency but were largely left unimplemented during the extended election season that has just wrapped up could still have severe ramifications for older coal-fired units and for the hydraulic fracturing sector. Fracking has been a vital component of the expansion in oil and gas production in the US, but concerns about its safety have led to a series of investigations by federal agencies in recent years and a number of concurrent proposed regulatory solutions that have attracted the ire of the oil and gas companies already operating under what they claim is a sufficient existing regulatory structure.

Shale gas accessed largely by fracking already accounts for roughly a third of US natural gas production, IHS CERA chairman and Pulitzer-prize winning author Daniel Yergin told the USAEE conference. “What makes [people] think it isn’t safe?” asked Yergin, who served on a White House commission on fracking; Improved transparency about best practices in the sector and greater understanding of the impact on local communities should help alleviate some of the concerns around fracking in the US, Yergin said.

The Trend is Your Friend

But these ongoing issues are in many ways ‘problems of plenty,” and the US is on a track to energy resource wealth that would have struck many of the same economists currently at the USAEE conference as fanciful if proposed a decade ago when natural gas prices were high and Californian power markets were in a state of repetitive failure.

Production and demand numbers tell the story of the emerging trend of abundance. A copy of the BP statistical review of world energy distributed at the conference and based on government and other data providers illustrated some of the remarkable growth of production in the world’s largest economy. The US produced 7.84 million barrels of oil each day in 2011, up from 6.73 million/day in 2008, and grew 3.6% year over year from 2010. Demand in the US actually slipped 1.9% in 2011 from 2010.

The statistics for natural gas in the US are even more striking. Production climbed 7.7% in 2011 over 2010 while consumption rose only 2.4% despite widespread switching to the cheaper fuel by power generators where they are able to move over from coal. Most remarkable and potentially transformative, though, has been the 20 year trend in natural gas proven reserves. At the end of 2010 the US had 8.2 trillion cubic meters of proven natural gas reserves, nearly double the 4.7 trillion cubic meters in place at the end of 1991 and a huge build on the 5.2 trillion cubic meters identified in 2001.

The ramifications of those shifts are potentially historic, with forecasters loosing predictions of impacts on global politics, currencies and the entire shape of the world economy in recent months as the scale of the resource has sunk in. With opportunities come risk though, and the industry is trusting the economists gathered in Austin this week to keep their watchful eyes trained on those dark clouds.