The implications of the shale revolution on the nation's economy, energy security and trade policy are causing struggles within the White House, according to energy security experts.

Charles Ebinger, senior fellow and director of the Energy Security Initiative at the Brookings Institution, said shale gas has caused a divide among some members of the Obama administration. Despite the apparent benefits of shale gas, Ebinger said, some view the so-called shale gale as a threat to renewables and see the country falling into "another age of fossil fuels."

"I think this is a defining moment for the Obama administration," Ebinger told energy industry members at the 2012 Deloitte Energy Conference near Washington, D.C., on May 22. "I sense you have two very strong views in the administration. One, probably most reflected in the White House, maybe the Council on Environmental Quality and Council of Economic Advisers, is that shale gas represents an incredible opportunity for the revitalization of the American economy, and [they are] very supportive of shale gas economics. On the other hand, it is clear there are many powerful members of the administration elsewhere, particularly in the EPA and supported by environmental groups, who argue that this is the wrong way to go."

Those opposed to shale gas appear to be digging in and preparing for a protracted fight, Ebinger said. He said he believes the future of natural gas may become the biggest single issue confronting President Obama's re-election within his own party.

Former U.S. Energy Information Administrator Guy Caruso has similarly heard rumblings of the growing conflict and said he believes it will play out in the election. Caruso, who now serves as senior adviser in the Center for Strategic and International Studies' energy and national security program, noted that the president has yet to fully embrace both shale gas and tight oil.

"There is certainly ambivalence among the environmental community about the implications of shale gas and tight oil for ambitious goals for renewables, reducing greenhouse gas emissions and energy efficiency," Caruso said. "The abundance of shale source rock natural gas and liquids, a la Bakken, could extend life of the fossil fuel era for many decades."

Caruso said he believes the White House will make an effort to promote shale gas as a good news story for the economy, while also saying it has to be developed with strict environmental standards. Simultaneously, the administration will continue to push its goals of reducing emissions and boosting energy efficiency.

Ebinger and Caruso are both curious to see how the administration handles LNG exports, which could have implications across a wide range of public policy. Ebinger, who led a yearlong LNG exports study for the Brookings Institution, said the best thing the government could do is neither prohibit nor promote exports. But after briefing officials at the U.S. Department of Energy, he said, he expects the administration to intervene in some fashion.

"The comment that was of great concern to me was, 'We love your study, it's philosophically where we want to go, but there may be political considerations," he said. "I didn't let that drop and said, 'What would the political considerations be if you agree with our analysis that there's no negative price impact to U.S. consumers?' ... The only comment I got was, 'There may be other political considerations.' I found that quite disturbing."

The DOE is studying economic issues associated with LNG exports and is due to release the second part of its findings at the end of the summer.

The Brookings study group concluded that exports would have minimal impacts on prices but could have significant impacts on geopolitics. Shipping domestic natural gas production to U.S. allies could help bring down prices in Asia and put pressure on Gazprom contracts in Europe, Ebinger said.

More fully developing North American natural resources could also limit imports from the Middle East, while boosting the U.S. balance of trade. The U.S. will probably become a net exporter of natural gas and, if allowed,  an even larger net exporter of refined petroleum products, Caruso said. And if production techniques are successfully exported, as well, global energy security would be bolstered as other countries develop their shale gas and tight oil resources. "This scenario remains an uncertainty," Caruso said.

He cautioned that a U.S. military presence will still be required in the Middle East because of broader security issues and because over the long term, global energy prices will still remain dependent on that region."An oil supply disruption in the Middle East could lead to devastating effects on the global economy," he said. "We cannot isolate ourselves from that reality."

Copyright 2012 SNL Financial LC. All Rights Reserved.

(Originally published May 24, 2012, in SNL Daily Gas Report.)