The head of the International Energy Agency (IEA) told U.S. Senators during a hearing that the U.S. is becoming the world’s “leader” in oil and natural gas production.
IEA chief Fatih Birol said one of the “[f]our large-scale shifts in the global energy system set the scene for the coming decades” is “the U.S. becoming the undisputed global oil and gas leader.”
“The remarkable ability of producers to unlock new resources cost-effectively pushes the combined United States oil and gas output in 2040 to a level 50% higher than any other country has ever managed,” Birol said in his Senate testimony. IEA is an independent agency set up in the wake of the 1973 Arab oil embargo to keep global energy statistics and respond to supply shocks.
“This is an impressive feat, which cannot be overstated. This makes the United States the undisputed oil and gas producer in the world over the next several decades,” Birol told lawmakers on Wednesday.
Birol’s testimony also focused on the “rapid deployment and falling costs of clean energy technologies and the “shift to a more services-oriented economy and a cleaner energy mix in China,” but U.S. energy prowess was a major focus for lawmakers.
It’s more good news for the Trump administration’s “energy dominance” agenda, which prioritizes production and exports. While the White House has faced setbacks in regards to repealing Obamacare and closing immigration loopholes, President Donald Trump has largely been able to achieve many of his energy policy goals.
Most recently, the Interior Department proposed a new five-year leasing plan that would open up nearly all U.S. coastal waters to oil and gas exploration.
The plan’s already come under fire, however, because Interior Secretary Ryan Zinke agreed to strike the Florida coast from the offshore lease schedule. Environmentalists see it as an opportunity to sue, and Democratic coastal governors are clamoring for meetings with Zinke.
“Secretary Ryan Zinke’s action of exempting just Florida from the Trump Administration’s proposed offshore oil drilling plan smacks of naked political favoritism. It’s also illegal,” California Rep. Ted Lieu, a Democrat, said in a statement.
“Exempting Florida but not another large coastal state like California has no rational basis, is an abuse of discretion, and is arbitrary and capricious,” Lieu said.
There’s also the question: Will energy companies bite at more offshore opportunities when ample onshore ones? New technologies have allowed companies to drill in previously inaccessible places, and rises oil prices are giving them more of an incentive to do so.
Birol’s agency sees most of the increase in U.S. oil production coming from tight oil formations, which are accessed through hydraulic fracturing and horizontal drilling. Birol sees the U.S. becoming a major global natural gas player.
“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,” Birol told lawmakers.
“As such, with the United States accounting for 80% 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,” he said.
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