President Obama is going to take another crack at tackling climate change.
It really was a non-starter in his first term, and had he dwelled on it, it could've made any chances at reelection much more difficult.
This second time around, however, reelection is not necessarily an issue. And this is likely the reason you heard the president include climate change in his inaugural address.
Of course, that doesn't mean much is actually going to happen... Sure, the president will continue to offer support for cleaner energy generation, but when it comes to curbing the effects of highly-pollutive industries, there's only so much he can actually do when there are few in the House that will bend an inch to support any kind of climate change or pollution mitigation regulations.
And let's be honest; the president isn't going to risk his legacy by putting too much pressure on the industries that keep our economy moving, either.
He's not going to burden domestic fracking operations; he's not going to hold up the Keystone XL Pipeline any longer; and he's not going to hinder the development of offshore drilling operations in the Gulf. Because, you see, all of those activities are already under way — and they have proven economic benefits.
But Obama still needs to save his environmental legacy, too. So he will go after the easy targets that'll likely get less pushback from Congress and from investors...
And there's one target that looks to be getting easier and easier.
No Small Score
I've discussed it in these pages before, and I continue to believe that while Arctic drilling operations are a lock in some of the world's most frigid waters, the risk-versus-reward scenario makes it something that could really struggle to advance in the United States.
Last year the media jumped on the news that a containment dome (a massive metal box that sits on standby to help contain oil spills) was damaged during routine testing. This happened in the freezing waters of the Chukchi Sea, where Shell has spent more than $4.5 billion so far — all in an effort to tap about 26 billion barrels of recoverable oil and 130 trillion cubic feet of natural gas.
Clearly, this is no small score. But because Shell's Arctic adventure has been plagued with delays and mishaps for more than six years, it is now vulnerable to those who don't want this nation to pursue Arctic drilling.
In fact, just a couple of weeks ago, two of President Obama's advisors called for a permanent halt to oil exploration in the Arctic.
According to a recent Bloomberg piece, Climate Advisor Carol Browning and former White House Chief of Staff John Podesta stated they believed there was no safe way to drill for oil in the Arctic region.
The president has already ordered a high-level review of Shell's Arctic plans following some equipment failures and, just recently, Interior Secretary Ken Salazar told reporters that he never felt comfortable with Shell's preparations for drilling in the harsh environment of the Arctic.
I doubt it's a coincidence that Salazar decided to speak up as he was preparing to depart his position... Either way, it looks like the wheels are turning in the White House to put the kibosh on Arctic oil.
Risk vs. Reward
Shell still has a long way to go in the Chukchi. Even after they finally get at that rich bounty of crude, the company will still be burdened with legal battles and additional regulatory headaches. Then they have to pony up billions more to build platforms, processing stations, and pipelines.
And understand this will happen while landlocked production of domestic shale and Canadian sands continues to soar...
Of course, this doesn't mean oil prices will necessarily fall far enough to make Arctic oil exploration a complete wash. And looking to the future, if we choose to rely on Arctic oil to continue to feed our fix, laying the groundwork today is absolutely necessary.
But purely from a personal investment perspective, all I see is an inordinate amount of risk with a potential reward that's at least another 15 years away...
This is why I continue to focus on domestic shale instead of anything else. The risk is minimal and the rewards are massive and immediate — especially with the logistics companies that service shale producers.
Bottom line: It's a great time to be in the shale game.
If you're not already getting a piece of this action, you're missing out on some serious life-changing profits.
To a new way of life and a new generation of wealth...
@JeffSiegel on Twitter
Jeff is the managing editor of Energy and Capital and contributing analyst for the Energy Investor, an independent investment research service focusing primarily on stocks in the oil & gas, modern energy and infrastructure markets. He has been a featured guest on Fox, CNBC, and Bloomberg Asia, and is the author of the best-selling book, Investing in Renewable Energy: Making Money on Green Chip Stocks. For more on Jeff, go to his editor's page.