* Report calls for more innovation, infrastructure upgrades
* DOE official says report a "wake up call"
* Strong storms, droughts could hit Gulf coast, shale boom
WASHINGTON, July 11 Rising temperatures and sea levels will profoundly impact the U.S. energy sector in coming years, the U.S. Department of Energy said in a report released on Thursday that outlined the need to mitigate the effects of climate change on power and fuel supplies.
The report warns of the risks of storms and coastal flooding to important oil and gas installations, the degrading effects of heat on the nation's electrical distribution system and how water scarcity could crimp new drilling technologies.
It also offers a glimpse into what role the Energy Department will play in the Obama administration's renewed climate change agenda that has focused mostly on actions it can take independently of the politically-divided Congress.
The report calls for more research into innovative technologies and cooperation between federal and local governments in making energy infrastructure more weather resistant.
Jonathan Pershing, deputy assistant energy secretary for climate change, acknowledged that major infrastructure upgrades would have to be funded by the private sector, but said the department could offer guidance and information to help states and companies make the most effective investments.
The Energy Department has not set a timeline for implementing the recommendations, but Pershing said the 83-page report should help focus federal efforts.
"This report is in some ways ... a wake up call internally, it identifies a really big problem," Pershing told Reuters. "We begin to make it specific and we can follow up from there."
The report described the difficulties energy producers could face as rapidly aging energy distribution systems collide with changing environmental conditions.
Increasing temperatures could overheat power lines, it warned, decreasing their transmission capacity and causing significant power outages during heat waves.
Superstorm Sandy last year exposed the East Coast's vulnerability to intense storms, when massive power outages crippled petroleum pipelines and left consumers unable to fill their vehicles at darkened gas stations.
Increasingly strong and frequent storms due to climate change will also put the U.S. Gulf Coast, which produces about half of U.S. crude oil and natural gas, at risk for major infrastructure damage and supply disruptions, the report said.
The nation's shale oil and natural gas boom, driven by water-intensive hydraulic fracturing, could have to contend with droughts and competition for water use from other sources such as agriculture.
Technologies that reduce the need for water use in oil and gas production and that increase the resilience of offshore oil and gas equipment and distribution systems could help to lessen these impacts, said the report.
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