As objects interact at various distances, how is potential energy affected?

Energy is not a physical unit. It is a philosophical concept and an accounting technique used to analyze mechanical and chemical exchanges. In nuclear physics it is defined as a wavelength of light, in biology it is a synonym for metabolism, and in public utilities they say energy when they mean connectivity. Anybody who uses the word in any other context either does not know what he is talking about, or is peddling something you don't need.

Your question has no specific answer. You just need to study the subject until you can compose a good question.