Energy is formally defined as the capacity of a physical system to do work. Ultimately, this work takes the form of movement. In some cases, such as that of a sports car, energy is used to provide motion as the ultimate goal. In others, such as home heating, energy is used to excite atoms and molecules on the microscopic level. This excitation is known to us as heat.
The modern world has been made possible by the ability of humans to harness, deliver and expend energy. That’s why the study of energy is critically important.
Although our energy needs are increasing, traditional sources of energy are becoming more difficult to find and extract. In the U.S., the development of unconventional and renewable resources is changing the way we generate and use energy.
In particular, the recent renaissance of American oil and gas production has resulted in major changes in our economy and geopolitical position. The opportunities provided by unconventional resources are accompanied by a new set of environmental challenges.
It is up to regulators to help ensure that the benefits of oil and gas extraction are pursued with respect for the human and environmental costs.
Before we dive into global energy economics, we need to start by answering two questions:
Where does energy come from and how do we harness it?
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