* Last energy bill was in 2007, before shale energy boom
* Senators aim to balance jobs with environmental protections
* Wyden favors effort to share royalty revenues with states
* Says tax reform should put renewables, fossils on equal footing
By Roberta Rampton
WASHINGTON, Nov 15 (Reuters) - The United States needs to update its energy policy to reflect the boom in natural gas and oil production that has boosted manufacturing jobs, said the top Democrat on the Senate energy committee on Thursday.
Ron Wyden, who is in line to take over the panel's gavel in January, said he sees the opportunity for "transformative energy policy" to both spur jobs created by the newfound wealth of energy while also protecting air and water from pollution.
But Wyden and Lisa Murkowski, the top Republican on the committee, who spoke at an event held by CQ Roll Call, provided few details on the shape new energy legislation would take.
But they stressed they wanted to work together on legislation that would strike a balance between economic development and job creation, and environmental protection.
"We feel really strongly about checking the gridlock at the door, working together on, in particular modernizing our energy policy," said Wyden, who represents Oregon and has a long history of working with Republicans on thorny issues including taxation and health care.
Congress has not had a comprehensive energy bill since 2007, well before the widespread use of hydraulic fracturing or "fracking" technology to blast free natural gas and oil trapped in shale rock.
Those abundant supplies have put the United States in line to become the world's largest oil producer by 2017, overtaking Saudi Arabia and Russia, the International Energy Agency said this week.
"I think everybody in this room would agree that there is a pent-up demand when it comes to moving energy issues through the Congress and updating, refreshing, just focusing on energy as a sector of the economy that has such potential," said Murkowski, who comes from the oil- and gas-rich state of Alaska.
The production boom now supports a total of 1.7 million jobs, a number that could swell to almost 3 million by 2020, forecaster IHS Global Insight has said.
President Barack Obama's administration is studying whether more environmental regulations are needed for fracking, and whether to end the industry's tax breaks - two developments that could curb production.
FEW DETAILS YET
Murkowski has been working on a long-term energy blueprint for about a year, and has been talking with Wyden about her ideas.
In May, she said it could include legislation to increase oil and gas production, improve energy efficiency, update the transmission and storage grid, and reduce the uncertainty in short-term tax incentives for wind and solar power.
"I want this to be a proposal of good ideas and direction," Murkowski said, saying she likely would not unveil the plan before January.
Wyden, who is also on the Senate finance and budget committees, said he wants the legislation to include measures to respond to coastal states' desire to get a piece of the tax revenues the federal government gets from offshore drilling projects.
Wyden said he hopes Congress will extend a wind production tax credit to preserve jobs in the sector.
He said he believes tax reform talks will focus on putting renewable energy and fossil fuels on a "level footing," although he acknowledged that tax breaks for all types of energy will likely be "ratcheted down" as Congress looks for ways to cut the federal deficit.
Both Wyden and Murkowski were skeptical about the political odds for a new tax on carbon emissions, an idea which has received considerable focus from both environmental groups and moderate Republicans.
On Thursday, conservative advocacy group Americans for Prosperity said House Republican leaders had signed a pledge to oppose a carbon tax.
"It's pretty obvious, and you've seen it again this week from comments, that whether you are for a carbon tax or against it, you'd have to say this is going to be a big lift, politically," Wyden said. (Reporting by Roberta Rampton; Editing by Lisa Shumaker)