New Year’s brings a time for all of us to review what we’ve accomplished over the past 12 months and chart a course for the future. It may sound cliché, but with such an eventful year behind us, and so many momentous challenges ahead, those of us here at Consumer Energy Alliance couldn’t resist the urge to compile our own Best of 2009 list. What follows are some of the milestone moments of the past year, in which our strong network of supporters significantly advanced our goal of making our country more energy secure and economically sustainable.

• New respect for Offshore Drilling. Yes, many key offshore sites remain off limits to exploration and production but 2009 was a year that policymakers from California to Florida revisited longstanding bans on offshore drilling. They recognized the advances in technology that are making it possible to conduct major projects with minimal footprint and conducted level-headed debates about reversing longstanding bans. Stay tuned – and stay engaged — for more in 2010.

• The sun rises over the Gulf of Mexico. From the appeals court ruling over the summer allowing drilling to go forward in a vast swath of the Gulf, to new data showing strong yields from some of the older properties in the Gulf, to BP’s massive discovery in that same region, you could say that everything old became new again in the Gulf.

• Silent majority finds its voice. It’s not easy competing against protesters who play fast and loose with the facts and even resort to donning furry animal costumes to get attention. Nonetheless, when the Interior Department solicited feedback on some contested offshore drilling sites, the supporters of responsible drilling significantly outnumbered those who cried “not in my backyard.” This letter writing campaign to Interior Secretary Ken Salazar was a major CEA initiative throughout much of the year, and turned out to be a major success. Thank you!

• Alaska’s oil industry gets some needed relief. Speaking of Ken Salazar, the Interior Department’s recent decision allowing Shell Oil to drill three exploratory wells in the contested Chukchi Sea was a significant milestone in efforts to tap the state’s vast oil and gas reserves.

• Renewable energy tapped for practical purposes. Renewable energy has always been a topic of interest to consumers but in 2009 the country made great strides in incorporating renewable power sources into our overall power supply, while recognizing both the limits of these sources as well as some niche applications ideally suited for renewables. Consider the solar powered trash can and some of the new uses for cow manure.

• The argument against exporting emissions gains traction. Politics might all be local, but emissions can travel halfway around the world in no time. Those of us who support a strong domestic oil industry have always understood the folly of exporting oil production, particularly to distant destinations that lack the environmental standards we have here at home. It’s one of the reasons, we’re so opposed to low carbon fuel standards. We clearly haven’t won this argument yet, but thanks to some of our vocal supporters – and some advanced science that can actually track the movement of things like toxic clouds from coal burning power plants in China – the not-in-my-backyard line of thinking is losing some power.

• Ocean Policy Task Force faces tough questions. If the Administration thought that while no one was looking, it could just impose a new layer of regulations on all of the industries that conduct business along the country’s waterways, it was mistaken. Shortly after the Ocean Policy Task Force was convened, lawmakers began raising questions about who would be setting the new rules and whether they could cost the country jobs.

Of course, we are a long way from winning the battle to prevent regulators from taking control of our oceans. Likewise the effort continues to bring responsible drilling and production to more of our coastal waters and ultimately produce more of the oil we consume in the U.S. In the coming weeks, we’ll outline some of the challenges for the New Year.

But for now, we leave you on an optimistic note. We thank you as always for your support.

Folks living within a vast swath of the eastern United States had their festive plans for caroling and last-minute holiday shopping disrupted over the weekend by the biggest snow storm in years. In many regions like the greater Washington D.C. area, the storm shattered old records for December snowfall … and winter hadn’t even officially begun yet.

The blizzard, combined with the sub-freezing temperatures, all but promises a white Christmas in regions hit by the storm.

Of course, snow days and sledding and cozy times together by an indoor fireplace come along with treacherous roads and driveways that need to be shoveled and the high heating bills required to keep everyone warm inside.

And this year, as people brace for those wintertime heating bills, they’ll be chagrined to discover that the soft economy has done little to lower the cost of keeping their homes warm. It’s an ongoing paradox we’ve discussed here before: how the normal rules of supply and demand don’t really apply when the product in question comes from overseas sources that have their own way of artificially controlling pricing.

Last summer, we discussed how oil prices were rising despite soft demand and swelling inventories. This winter, prepare for more of the same. We’re approaching our third straight year of economic downturn, and supplies of heating oil are overflowing, so much so that the early snowy cold spell isn’t expected to make much of a dent. Still, many forecasts show consumers paying more for their heating oil this year than they did in 2008 – when, by the way, it was hardly cheap.

Low demand and high prices: It’s a paradox indeed, but it’s not a mystery. Heating oil prices rise when crude oil prices rise. And here in the U.S., crude prices rise for all sorts of reasons, usually reasons that have little to do with supply or demand, or even the weather. Like so much of the oil we consume, the explanation for those persistently high winter heating prices is located far from home.

Wishing you a warm holiday.

Exxon Mobil this week announced plans to buy the independent gas producer XTO Energy for $41 billion – by far the largest deal for the company since the merger between Exxon and Mobil a decade ago.

Clearly this purchase signals a deeper commitment to developing natural gas: XTO has about 14 trillion cubic feet of proven gas reserves. But it also shows a clear focus on producing gas from shale. A large portion of XTO’s reserves are located in so-called unconventional sources, such as shale rock. Shale has long been recognized as a major source of oil and natural gas, but the technological challenges of getting to it have left much of that fuel untapped.

The New York Times offers a good overview of the Exxon Mobil’s systematic strategy in recent years to accumulate unconventional natural gas sources including shale. By adding XTO to its mix of existing properties, the company shifts shale gas production from a niche business to a core one.

In all likelihood, the acquisition will probably set off a race among many oil producers to develop natural gas and oil from shale on a much larger scale. Already, there are many sizable shale development projects underway, such as Range Resources’ Marcellus Shale project in Pennsylvania that produces 100 million cubic feet of natural gas per day – enough to power about 500,000 homes. Chevron has hinted that it is interested in making an acquisition that would give it a base of shale gas reserves large enough to make development economically feasible.

The importance of shale to the global energy industry and to domestic energy independence can hardly be overstated. Recent estimates suggest the world’s supply of shale oil resources exceeds its supply of conventional oil reserves. And the largest deposits are right here in the U.S. Of course, accessing more of that oil, and natural gas, will depend on finding technologically and economically feasible ways to do so.

As more money is committed to this promising source of domestic fuel, the technology used to develop it will inevitably improve, putting more volumes of shale oil and gas on the market. This steady supply tends to lead to greater price stability and that, in turn, increases demand. It’s a cycle by which a commodity comes to be mass produced and all signs suggest that for shale rock, that moment has come.

The Low Carbon Fuel Standard is making the rounds again in news reports about national and global energy policies. And why not? What’s not to like about low carbon fuels? With such an innocuous name, this looming legislation is bound to resurface every time people talk about policies for reducing emissions.

But you know what they say about things that seem to be true.

As we’ve said before, low carbon fuel standards just don’t make a lot of sense. There’s no evidence that such a law would actually reduce emissions, and many reasons to conclude it would actually result in the U.S. increasing its dependence on Mideast Oil.

But since we’re all likely to be hearing more about the Low Carbon Fuel Standard in the months ahead, it’s worth broadening the argument beyond what those of us here at CEA have to say about it and showing what the science says.

Earlier this year the American Economics Journal published a paper which concluded that a low carbon standard does not decrease overall emissions. Rather, it simply changes the mix of fuels consumed in a manner that might actually have the completely unintended consequence of increasing overall consumption and emissions.

That’s essentially because this fuel standard does not seek to limit actual emissions. Rather it would try to limit production and consumption of certain carbon-intensive fuels, while inadvertently promoting the carbon-light ones. It sounds confusing and it is. Attempting to judge different types of oil or natural gas on the basis of their carbon content – with no regard for shipping costs and multiple other factors – is in the end a dangerous guessing game.

The authors of the study, Greenhouse Gas Emissions Reductions under Low Carbon Fuel Standard? argue that energy consumers told to low-carbon fuels are likely to respond the same way as a child who eats a lot of chocolate and is told to eat more bananas. Rather than replacing the chocolate with a banana, the child would most likely eat the chocolate and the banana, increasing his overall calories.

It’s a useful analogy to remember when trying to make sense of the Low Carbon Fuel Standard … one that gives new meaning to the idea of a kid in a candy store.

To fully appreciate the significance of the Interior Department’s long-awaited decision earlier this week to allow Shell Oil to drill three exploratory wells in the contested Chukchi Sea, you need to keep in mind the recent struggles and uncertainties that the oil industry in the state of Alaska has faced.

Last month, ConocoPhillips announced that for the first time in 40 years, it had no plans to drill new exploratory wells in Alaska. BP, meanwhile, reportedly cut its 2010 development budget for Alaska by 15%. Volume on the trans-Alaska pipeline is way down from its 1988 peak, reflecting a failure of newer fields to offset the decline from Prudhoe Bay. And as capacity approaches the point at which operating the pipeline would no longer be feasible, thousands of jobs, as well as the future of the state’s main industry hang in the balance.

All of these developments are part of a general uncertainty over the future of the Alaskan oil production. The uncertainty comes not from any doubts about large volumes of untapped reserves in the state: By conservative estimates, Alaska’s coastal waters hold 27 billion barrels of oil and 132 trillion cubic feet of natural gas. Rather, questions persist over our ability to access those reserves.

The December 7 Interior Department ruling allowing Shell to drill in Chukchi resolves a longstanding dispute in one of the state’s most oil rich regions. An appeals court ruling earlier this year had allowed some other oil and gas projects in Alaska that had been initiated during the Bush Administration, but then held up under Obama, to go forward.

The Chukchi Sea is considered one of the most underdeveloped sources of oil in the U.S. Shell is eager to begin drilling. Alaska Governor Sean Parnell is also looking forward to the project getting underway. “Alaskans need these jobs and Shell is well prepared to explore for and develop oil and gas basins critical to our nation’s security,” he said in a statement.

However, it is worth stressing, as we’ve said before on this blog, that oil majors in no way regard this, or any other favorable ruling, as a license to drill with abandon. In fact, Shell won approval to drill in Chukchi only after it presented a proposal that addressed environmental concerns, in part by tightening the pollution controls on its drill ship. It was a costly and time consuming investment that should underscore the industry’s interest in Alaskan oil and gas, but its desire to do right by the state over the long haul.