It didn't take long. If you had any illusions about fossil fuels growth being a proverbial walk in the park during our president's second term, you saw them obliterated on Friday. That is, unless the significant energy news emanating from Washington that day was effectively hidden by the David Petraeus bombshell, such that you missed its under-the-radar announcement.

If so, just to catch you up, on last week's final business day, just three days after our quadrennial presidential election and in an abrogation of any professed support for an "all-of-the-above" energy policy, the Interior Department issued a final plan that would close 1.6 million acres of federal land in the West. Those lands had originally been targeted by the Bush administration for oil shale development.

You'll no doubt hear more about this issue, since it will now move to a 30-day-protest period, along with a 60-day process to ascertain that it isn't in conflict with local and state policies. Which, of course, it is. Nevertheless, there's a host of other issues that both the citizenry and the administration will face during Obama's second term. Before I touch on at least some of these, keep in mind our propensity to -- often incorrectly -- extrapolate current energy circumstances ad infinitum. During the 2008 campaign, for instance, most of us assumed that we were headed for a natural gas shortage. How things can change!

Now, as we move toward the initiation of Obama II, there are several other issues toward which energy investors should be watchful. Let's begin on the natural gas side.

Domestic gas production
You know the story of gas production in the U.S. Thanks largely to George Mitchell, the founder and CEO of Mitchell Energy, which now is owned by Devon Energy (DVN 0.73%), recovery of gas from shale formations, beginning in the Barnett Shale of North Texas, became viable. Obviously the key was the economic use of hydraulic fracturing -- fracking -- which involves the pressurized pumping of millions of gallons of a water, sand, and chemicals combination into a well to release hydrocarbons trapped in the rock. Shale gas now accounts for about 10% of the total U.S. energy supply. The salient question is the extent to which companies like Chesapeake (CHKA.Q) and ConocoPhillips (COP 0.20%) will permit their outputs to sag for pricing reasons before returning to their prior levels.

Despite all the ebullience about our higher gas supplies and production, energy expert Bill Powers argues that our shale gas supply will last only five to seven years, and not for perhaps the century that many suppose. If he's right, warning sirens in the form of rapid production declines will begin to sound within the next four years. (Powers' forthcoming book,Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth, will be published in the spring.)

Prices
The current gas prices near $3.50 per million BTUs today is less than a third of its 2008 levels. Some suspect that appreciably higher levels would unleash cheaper coal substitution among the power companies. If they're right, and our supply really consists of decades of availability, we'll be sitting pretty for years to come. But If Powers' contentions are accurate, or we eventually overdo the production and export of LNG in the later years of Obama's next term, our prices could rise dramatically. In Japan, which is LNG-dependent, gas levies currently sit at about $17 per million BTUs.

Attacking fracking
Fracking has been under steadily increasing attack from both environmental groups and the U.S. Environmental Protection Agency for the past few years. Depending upon the extent to which those attacks escalate -- watch for the release of Matt Damon's film Promised Land next month -- shale production could decline materially, with natural gas prices in turn moving back to double-digit levels.

The coming LNG contest
Cheniere Energy (LNG -0.30%), among others, is preparing to produce and export LNG from the Gulf Coast in about the next three years. Some are concerned about the effects on prices from U.S.-produced LNG, arguing (perhaps plausibly) that initiation of LNG exports will have an arbitrage effect, raising our prices to somewhere between their current levels and those extant in places like Japan.

A converse school of thought maintains that price escalations would be moderated by LNG generated by other producing nations. Still others question how we in the U.S. can, for instance, justify having effectively coerced Japan into rejecting Iranian crude, without subsequently compensating them with U.S.-produced LNG. All in all, assuming our gas availability remains plentiful by about 2015, LNG contentiousness could lead to a doozy of a skirmish.

International fracking
New fracking operations in the rest of the world -- depending upon their levels of success -- will obviously affect gas prices in general and the LNG scene in particular. At present, Chevron (CVX) -- among others -- is meaningfully ramping up its unconventional drilling in Poland. And while even CNOOC (CEO) has indicated that it'll be measured in moving forward with the technology in China, it'll only take a modicum of unconventional drilling successes to unleash a bevy of activity on the international fracking front.

In the second part of this article we'll turn to all-important considerations of oil and geopolitics. In the meantime, I urge Fools to add ExxonMobil (XOM 0.15%) -- our country's biggest natural gas producer and a major factor in the expanding international crude oil picture -- to My Watchlist. The company can serve as an ideal proxy for the entirety of the petroleum industry.