The International Energy Agency's (IEA's) executive director, Dr. Fatih Birol, recently testified before the United States Senate about the agency's global market outlook.
In his testimony to the Senate Committee on Energy and Natural Resources, chaired by Sen. Lisa Murkowski (R-Alaska), Birol outlined four large-scale shifts in the global energy system that will set the scene for the coming decades, and which were analyzed in detail in the IEA's recent World Energy Outlook 2017 report.
These four major trends include the rapid deployment and falling costs of clean-energy technologies and the growing electrification of energy -- both challenges Birol maintained the U.S. is well positioned to meet.
"The U.S. already boasts a number of power system flexibility resources, including more flexible thermal power plants (mainly gas, but possibly also coal), multiple storage options, and demand-side response," he explained.
The other two trends Birol enumerated are the shift to a more services-oriented economy and a cleaner energy mix in China, and the resilience and further growth potential of shale gas and tight oil resources in the U.S. In particular, Birol noted the resilience of shale oil and gas in the U.S. and the remarkable ability of producers to unlock new resources cost effectively. This has pushed the combined U.S. oil and gas output in 2040 to a level 50-percent higher than any other country has ever managed.
"This is an impressive feat, which cannot be overstated," Birol said. "The United States is poised to become the undisputed oil and gas producer in the world over the next several decades.
"In our projections, the 8-mb/d [million barrels/day] rise in U.S. tight oil output from 2010 to 2025 would match the highest sustained period of oil output growth by a single country in the history of oil markets. A 630- bcm [billion cubic meters] increase in U.S. shale gas production over the 15 years from 2008 would also comfortably exceed the previous record for gas.
"Expansion on this scale is already having wide-ranging impacts within North America, fueling major investments in petrochemicals and other energy-intensive industries. It is also reordering international trade flows and challenging incumbent suppliers and business models.
"By the mid-2020s, the United States also becomes the world's largest liquefied natural gas (LNG) exporter and a few years later a net exporter of oil -- assuming increasingly stringent fuel economy standards are enacted. Your country remains a major importer of heavier crudes that suit the configuration of your refineries, but at the same time a larger exporter of light crude and refined products.
"As such, with the United States accounting for 80 percent of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, our projections suggest that the world's consumers are not yet ready to say goodbye to the era of oil."
To conclude his comments, Birol reiterated the centrality of U.S. oil and gas production to the global energy landscape in the next few decades. "The last few years have seen an acceleration in the evolution of the global energy system, with the centers of gravity for both demand and supply shifting dramatically," he said. "The United States is a key player in this evolution and will no doubt continue to help shape the energy system over the coming years."
While in Washington, Birol also held a bilateral meeting with Deputy Secretary of State John S. Sullivan to discuss developments in the global energy markets and their implications for the U.S. He also presented the World Energy Outlook 2017 to the Center for Strategic and International Studies. His presentation can be viewed at www.csis.org/events/ ieas-world-energy-outlook-2017.
For more information, Birol's full written testimony and a recording of the session, visit www.iea.org or www.energy. senate.gov.
For ongoing industry updates, visit BICMagazine.com.
