THE ENERGY OPPORTUNITY - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 200

hurt the U.S. economy, fossil-fuel emissions increase the likelihood of
dangerous climate change, and domestic gas has spared the country
some geopolitical risks.
But there is a lot we don't know with anything close to high preci-
sion. We can't say with enormous coni dence how much oil or gas the
United States will produce, how much it will cost to extract, or how
welcoming af ected communities will be. We can't i rmly predict the
costs of increasing the ei ciency of U.S. cars and trucks, and we cer-
tainly don't know when electric vehicles will become a big commercial
prospect. We don't know exactly what will happen to the cost of alter-
native fuels over the next i ve or ten years. Nor, for that mat er, can we
predict what will happen with the costs and safety of nuclear power or
carbon capture technology.
h is uncertainty extends beyond energy sources. At er nearly four
decades of hard work, economists still can't agree on whether spiking
oil prices cause recessions, but they dei nitely can't rule out the pos-
sibility that they do. National security strategists can't agree on whether
dependence on natural gas imports would expose the country to big
geopolitical risks, but few are anywhere close to dismissing the link.
Scientists can't pin down just how bad every ton of greenhouse gas
emissions will be for climate change, but most agree that the damages
could be very large. Indeed, the unknowns of the energy world are
almost always its most troubling elements.
h is suggests that a U.S. strategy focused on reducing exposure to
big risks rather than on i ne-tuning the economy would be wise. Such
an approach is alien to many strategists who think about energy, but it
is common in other places. Investors regularly face massive uncertainty.
h ey cope in large part by diversifying their i nancial portfolios. h is
doesn't mean they invest in every prospect that comes along—some
potential investments are clearly destined to be disastrous, and others
have lit le hope of yielding big returns—but it does mean they focus
on knowing and reducing their risks. h e smart investor also maintains
some l exibility, making sure to dispose of bad bets when they material-
ize and to seize new opportunities as they arise.
h ere are even parts of the U.S. government that regularly focus on
uncertainty. h e Department of Defense, at its best, is a great example.